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A Complete Guide on Car insurance and Reasons for its Rejection

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A Complete Guide on Car insurance and Reasons for its Rejection
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Apart from being mandatory, a car insurance benefits you in a number of ways. But just like any other type of insurance, claiming the motor insurance is something that should be done carefully. In this post, we’ll have a look at some common reasons for claim rejection.

A car insurance is mandatory for every four-wheeler in India as per the Motor Vehicles Act of 1988. But apart from being compulsory, there are many different ways in which the insurance can benefit the vehicle owner. For instance, with the insurance, you’d not be required to pay for the damages that happen to your car or the car or property of the 3rd party in case of an accident.

But to get the cost of such damages paid by the insurer, you need to file a claim after an accident. Just like any other type of insurance, the motor insurance claim too can be rejected for a number of reasons. Let us have a look at some of them.

Delay in informing about the accident

One of the most common reasons for car insurance policy claim rejection is a delay in reporting the accident. Most of the insurers require you to inform about the accident within 48 hours. While there can be relaxation by some insurers or in some cases, you should make sure that the claim is filed soon after the accident if possible.

Not having a valid driving license

Even when a vehicle is adequately protected by an insurance, the insurer has the right to reject the claim if the driver doesn’t have a valid license or if it is expired. Having a valid license for the type of vehicle you drive is not only necessary as per the insurance policy but also as per the Motor Vehicles Act and can result in a penalty.

Non-payment of premiums

Your claim can be rejected by the auto insurance company if premiums for the policy are unpaid. Ensure that the premium payments are up-to-date and you pay them as soon as possible rather than waiting for the due date. The car insurer won’t be responsible for the damages if you have pending premiums.

Tips to Avoid Claim Rejection

If you want to ensure that your insurance claim is not rejected, remember the tips mentioned below-

  • At the time of buying an offline or online car insurance, make sure that you do check the claim process of the insurer. There should be multiple ways in which you should be allowed to file the claim.
  • Check the CSR (Claim Settlement Ratio) of the insurer. The claim settlement ratio will offer a good idea about the settlement quality of the lender.
  • If you have purchased add-ons with the policy, like an add-on to cover the expensive gadgets you have installed in the car, ensure that you do keep the receipt/invoice of such gadgets as you might need them when filing claims in case of an accident.
  • If at all your car is stolen, make sure that you do file an FIR at the nearest police station. You’ll need it to file the claim for a stolen car.

Know these common reasons for the rejection of claims and remember the tips to make sure that your claim is approved as quickly as possible.

Read more on Car insurance Claim.

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