5 Reasons Your Car Insurance Claim Gets Rejected

In some rare occasions, insurance companies reject car insurance claims from its 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.

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 with the accident’s narrative. If the surveyor feels that your claim is not genuine, he/she might reject your car insurance claim.

Hence, it’s important to file a claim only when it’s genuine and necessary. There is no point in trying to dupe the insurer by narrating a false accident story as it will only lead to the rejection of the insurance claim. If a surveyor isn’t satisfied with your claim, it’s you must convince him about the authenticity of your 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 document, Registration Certificate (RC) of the car, FIR copy (in case of theft), driving license and Aadhar card 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. Hence, it’s crucial to collate all the required documents before filing a claim. If your claim has been rejected once due to improper documentation, you can file it again with all proper documents.

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 drink and drive, driving without a valid driver’s license, making illegal modifications to a car etc.

In such cases, the car insurance claim will be outrightly rejected by the insurance provider and there’s nothing that you can do about it. The best way is to follow all traffic rules and maintain safety standards while driving your car. Also, when you make any modification to your car, you must inform your insurer in advance.

Reason 4 – Delay in filing the claim

Unnecessary delay in filing a car insurance claim can lead to its rejection. Usually, there is a deadline before which you’re required to intimate 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 afterwards.

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. In case you miss the deadline due to a valid reason, you can write a letter or an e-mail to your insurance provider, requesting them to consider your claim. You should mention about the reason why you were not able to file the claim within the deadline.

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 expired. 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.

You must renew your car insurance policy well before its expiry date to avoid such a situation. In case you tend to forget the renewal date, you can sign-up for auto-debit of premium from your bank account. You can also set up reminders in your smartphone so that you don’t miss out on your car insurance renewal date.

How to challenge a claim denial?

Usually, motor insurance companies reject claim only when they have genuine reasons to do so. By keeping in mind the above points, you can minimise the chances of your car insurance claim rejection. Still, if you feel that your claim is being wrongly denied by your insurer or the compensation is inadequate, you can raise a complaint with its customer care department.

If you’re still not satisfied, 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.