When can your car insurance policy get rejected?

Buying a car is the most beautiful day of your life. It is like a dream come true for you. But the most painful part is when your car meets with an accident. This accident creates a dent into your heart. A car accident is always distressful situation for the car owner. Not only is there the risk of physical injury and the inevitable damage to your car, but there is also possibility of the insurance company rejecting your claim if not adhered by the policies properly. Most companies scrutinize the damages very well before proceeding towards the claim procedures. They reject the claim if any clause is found inappropriate and doesn’t adhere to their terms and conditions.

In this article, we will discuss the reasons for insurance companies rejecting the car insurance claims. Different automobile insurance policies may have different clauses. Therefore, you should read the policy document carefully, to make sure that you understand your rights and obligations.

Here are few reasons why your accident claims can be rejected.

The basic point to remember: Any insurance policy applies, only in the case of accidents. If any part of your car fails due to natural wear and tear, then it is not covered under car insurance.

Insurance companies abide by strict laws. Your insurance claim will be rejected, if during the accident, the driver was under the influence of intoxicants like alcohol or drugs.

You buy private car insurance and use your car for commercial purposes such as taxi, courier service; parcel van etc. then your insurance claims may be rejected. If you intend to use your car for commercial purposes, then you should buy a commercial car policy.

Reporting an accident immediately is very important clause. Normally, insurers allow a 48 hour window for accident to be reported. Some insurers may allow some relaxation in the time frame during which accidents can be reported, but beyond a certain time limit, they may reject the claim. You should report your accident to your insurance company, immediately else your cover goes for a toss and it’s bound to get rejected.

You buy a second hand car and the car insurance is not been transferred to your name, then the insurance company may reject your claim. This happens mainly because your name doesn’t match on the registration certificate (RC) book. Some insurance companies may have a grace period, but it is always a good idea to get the seller to endorse his or her car insurance policy in your name immediately after you get the registration transferred in your name.

The insurance company may reject your claim if the accident occurs outside the geographical area as defined in the policy. There are geographical zones for automobile insurance, as defined by the IRDA. Normally, automobile insurance is applicable throughout the country. Check your car policy and to get clear idea about the boundaries set.

Insurance company will reject your car policy, if there are consequential damages which are indirect result of a direct loss. Let us suppose, your parking spot is in a low lying area and has been flooded due to rains. Car insurance will cover any damage to the car caused by flooding. But, if the driver starts the car despite the engine being flooded causing an engine failure, then the cost of engine repair will not be covered. In this event there are chances that your insurance gets rejected.

We have discussed few of the reasons under which there are chances that your car insurance might be rejected. Everything will not apply to you so it’s better that you read insurance policy wording very carefully to fully understand under what conditions your claims may be rejected.