Car Insurance Claims

Reasons for Rejection of Car Insurance Claims

It can be really devastating to be involved in a car accident. Apart from dealing with personal trauma, a host of actions have to be taken – informing the authorities, contacting authorised car service garages for repairs and then the paperwork for filing insurance claims. At this stage, people tend to get a bit complacent knowing that their vehicle is comprehensively insured. However, when the insurance claim gets rejected for some reason or the other, it generally turns out to be a financial calamity of sorts. But why do insurance claims get rejected? Here is a rundown of some of the major causes which if avoided can give you some respite even after an accident.

  • Lapsed insurance policy – You will be more than careful about keeping a valid insurance cover when you have a new car. But sometimes in the case of an old car, people are not that scrupulous about timely policy renewal. Most insurers will reject a claim if an accident or theft has occurred even a single day beyond the date of expiry of the policy.
  • Fraudulent claim – You have to be meticulously truthful and honest while submitting your claims. Exaggerated claims to get more from the insurance company or to have additional car repairs done beyond accident damage is an act of fraud and can get you into legal trouble. Hence it is always advisable to have your car checked and a quote for damage repairs obtained from a reputed and certified service station in your locality. For example if you are a resident of Melbourne you can opt for top of the line garages for smash repairs at Hoppers Crossing for an estimate. You will be on the right side of the law and thereby reduce the possibility of claim rejection.
  • Delay in accident reporting – Most insurance companies have a 24 to 48 hours window for reporting an accident to your car. This is generally to give you time to get over the incident before getting down to the formalities. Your claim may be rejected for any delay beyond that. Moreover, if you continue driving your car in that period and further aggravate the damage, the claim will be definitely rejected.
  • Driving without a licence or under influence – It is mandatory that a car should always be driven by a valid licence holder. Any deviation in this regard will mean that a claim cannot even be raised. Similarly for accidents that occur when the driver is under the influence of alcohol a claim made will be summarily rejected.
  • Wrong use of vehicle – Every vehicle use is defined by the insurance company in the policy including the number of permitted passengers. For example, a racing car has a higher premium than an average family car due to the increased risk factor. However, if it is seen that a car has been in an accident during racing when it is not insured to be so, the claim will not be allowed. Another instance is overloading the vehicle beyond permitted capacity even if that was not the cause of accident.
  • Not informing the insurance company before repairs – It is necessary that the insurance company be informed of the accident before repairs are carried out so that they can trace back the cause of accident. You cannot have the car repaired from own funds and place a claim later. This is because if any claim has to be considered a survey has to be carried out by an authorised person of the insurance company before repairs can be taken up. Not following this process will lead to claim rejection.

Keep these things in mind if you want to avoid the possibility of car claims rejection.

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