Why car insurance claim gets rejected?

On some rare occasions, insurance companies reject car insurance claims from their customers. This is generally done when an insurer feels that the claim filed by its customer is not valid or genuine. In such a scenario, the insurance provider doesn’t pay for the damages to the insured car and the car owner must bear this cost out of his/her pocket.

Such a situation can be extremely stressful for any car owner as the repair bills can easily run into several thousand or even lakhs of rupees. Of course, you would never want yourself to be put in such a situation. But what if your car insurer rejects your claim even if you have all the genuine reasons to get it approved?

In this article, we will discuss some common car insurance claim rejection reasons and what steps you can take if an insurer rejects your car insurance claim. Read on.

Common Reasons for Car Insurance Claim Rejection

There are a number of reasons why your car insurance claim may get rejected-

Reason 1 – If your claim is found to be non-genuine

When you file a car insurance claim, your insurance provider appoints a surveyor to inspect the genuineness of your claim. The role of this surveyor is to inspect your car and the damages and determine whether it matches the accident’s narrative. If the surveyor feels that your claim is not genuine, he/she might reject your car insurance claim.

Reason 2 – Inability to produce the required documents

Another common reason for the rejection of motor insurance claims is the inability of the policyholder to produce the required documents. Usually, when a customer files a car insurance claim, insurance companies ask for some basic documents such as policy documents, a Registration Certificate (RC) of the car, FIR copy (in case of theft), driving licenses, Aadhar cards of the driver/owner, etc. If you’re not able to submit any of the documents asked by your insurance provider, your car insurance claim might get rejected.

Reason 3 – If you are found to be violating traffic rules when the accident happened

A car insurance policy provides coverage against unfortunate road accidents or natural calamities. However, it doesn’t cover the damages caused to an insured car if the driver or claimant is found to be violating traffic rules, including drinking and driving, driving without a valid driver’s license, making illegal modifications to a car, etc.

Reason 4 – Delay in filing the claim

An unnecessary delay in filing a car insurance claim can lead to its rejection. Usually, there is a deadline before which you’re required to inform your insurer about an accident and associated losses to get your claim approved. In case you fail to file your claim within this deadline, your car insurance provider might not consider your claim afterward. Therefore, it’s prudent to know about this deadline (which is usually 48 to 72 hours after the accident) and file your claim well within it.

Reason 5 – Non-renewal of car insurance policy

Insurance companies do not entertain claims made on lapsed policies. It may happen that you forget to renew your car insurance policy on time, and it expires. Now, if you meet with an accident and make a claim on your policy, it will be rejected by the insurer. Worse, your car will be considered as an uninsured vehicle and you may get fined by the traffic cops.

Reason 6- Using a private car for commercial work

If your car is registered with the insurance provider as a personal vehicle and you regularly use it for commercial purposes, this might lead to a denial of your insurance claim in case of a mishap.

Reason 7- Providing false information

Providing false or incorrect personal details while buying vehicle insurance is a major reason behind claim denials by the insurer. In some cases, people furnish incorrect information to get lower premium rates, which could raise a red flag for the insurance provider, who will mark the policy invalid.

Reason 8- Changes in vehicle accessories without informing the insurance provider

Whenever you make any additions or modifications to your vehicle, you need to inform the insurance provider before the renewal deadline of the policy. If you fail to do so or get any repairs done without the insurer's knowledge, chances are that your claim will be rejected.

Reason 9- If you were driving outside the specified geographical area

Some insurance policies provide coverage for accidents that happen within a geographical limit defined by them. Any mishaps occurring outside this radius are not covered by the insurance providers. Thus, it is advised to read all terms and conditions before buying car insurance online or offline.

Things to Keep in Mind While Claiming Car Insurance

If you need to claim your car insurance, keep these points in mind-

1. Have proof of damage: Keep photographs and additional details of the accident and the damages caused to your vehicle or third party. This is to be submitted to the surveyor sent by the insurance provider, to smoothen the claim process.
2. File an FIR for the accident: In case of mishaps involving major damages to your vehicle or the life and property of a third party, filing a police FIR is a must. Failure to do so may lead to rejection of the claim.
3. Do not repair the damages before informing the insurance provider: Do not get any repairs done without the knowledge of your insurer. According to the policy terms, the vehicle needs to be checked at the place of the accident. After the car has been inspected, send it to a network garage or any other repair shop and start the claim procedure.

Tips to Prevent Car Insurance Claim Rejection

Here are a few tips that will minimise the risk of claim rejection-

1. Always renew the policy before the deadline: Do not wait till the last date, and renew your car insurance before it expires to enjoy the benefits without a break.
2. Provide all necessary documents: Be prepared with all the originals and copies of the required documents to ensure your claim is not rejected due to incomplete documentation.
3. Read all terms and conditions: Go through your car insurance documents and familiarise yourself with all the policy clauses.

FAQs

1. What should I keep in mind while buying car insurance online?

Buying car insurance online is quite easy these days. However, it is advisable to compare the policies and choose the best one for your vehicle. Buy your car insurance from the official portal of a trusted insurance provider to avoid any complications in the future.

2. How to challenge a claim denial?

If you’re not satisfied by the claim denial, you can raise a dispute by writing to the Insurance Regulatory and Development Authority of India (IRDAI) and the Third-Party Administrator (TPA). After receiving your dispute letter, a tribunal court may be set up to decide whether the insurer should approve your claim or not, and how much compensation you should receive.

3. How to renew car insurance online?

Visit the online portal of your insurance provider and in the car insurance section, find “renewals” and provide your insurance policy number and other details. Follow the instructions and make the fee payment to confirm the renewal of your policy.

4. When does the car insurance become invalid after its expiry date?

A car insurance policy becomes invalid the moment it expires. So, if your policy has expired on 1 March 2025, it becomes invalid from the same date.

5. Can I renew my car insurance after its expiration without an inspection?

The need for a car examination depends upon the insurance provider. If the policy has expired for a long time, the insurer may insist upon an inspection before starting the renewal process.

Conclusion

Car insurance is an essential protection for your financial well-being, but the approval of a claim depends upon several factors. In this blog, we have mentioned the common reasons why an insurance claim may get denied and how you can make the claim procedure smoother. Keep your policy updated and have clear communication with the insurer by providing correct information and adhering to the terms and conditions of the policy. With the right approach, you can avoid the risk of insurance claims getting denied and enjoy the benefits of your car insurance policy.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.