 "Ignorance shouldn't lead to claim rejection")
If you have been diligent about renewing your car insurance year after year, it is natural to expect that the insurer will pay up when a claim arises. Sometimes, however, claims of even bona fide customers get rejected. And it is usually due to ignorance on their part. That is why, in addition to paying your premiums regularly, you also need to adhere to a few rules to ensure that your claim gets processed without a hiccup.
Don't violate Motor Vehicles Act
You may have a perfectly valid insurance policy, but your claim will not be honoured if you have violated any law when the accident occurred. For instance, if you or your driver's driving licence was invalid at the time of claim, the insurer will reject your claim. In fact, if you had given your car for use to a friend or family member who did not have a valid driving licence, and the car got damaged, your claim will be declined. Similarly, damage caused while driving under the influence of any intoxicant or alcohol will not be payable.
If you have hired a driver for your car, ensure that you keep a copy of his driving licence, photo ID and address proof with you always. In case there is a major accident, your driver may disappear, leaving you high and dry.
The law also stipulates that you cannot use a private vehicle for commercial purposes. Insurers treat private and commercial vehicles differently, which is evident in their pricing. If you use your private car for commercial purposes, your damage claim will be rejected if your car meets with an accident.
Don't damage vehicle through negligence
Insurance companies do not pay for what is perceived by them as gross negligence on the part of the driver or owner. If you park your car in an area very close to a building that is under construction, despite there being a warning sign, and your car gets damaged, the insurer may deny your claim citing negligence.
Similarly, you may have to forfeit your insurance claim if you continue to drive your car after it was damaged in an accident, causing further consequential damage to it. Say, you accidently run your car over a large stone and damage the underbody or the front of the car, it is advisable to immediately stop driving the car to avoid damaging the engine. Any harm caused to the engine due to continued driving in such circumstances will be treated as consequential damage by the insurance company and it will not pay your claim.
If your vehicle is stolen, insurers will demand the original car keys when you make a theft claim. In case you have lost your original car keys, insurers are known to decline such claims, citing gross negligence.
Establish ownership clearly
As a fundamental principle, insurers need to establish ownership or financial liability on the car with the policyholder to be able to insure the vehicle under his name and hence pay claims. If the car has been sold, it is important that the transfer of ownership is recorded at the Regional Transport Office, and the insurer is informed so that the required endorsement on the policy is issued. In case you are the buyer, you must not drive or take active possession of the vehicle till the paperwork regarding transfer gets completed. In case an insurance claim arises before ownership has been transferred and recorded, the insurance company will neither pay the claim to the preceding owner nor to the new owner as ownership is not clearly established.
Intimate damage immediately
According to policy terms, you need to notify your insurer immediately after an incident. Generally, you can't make a claim for a damage that is more than two weeks old, unless you have a valid reason for the delay in intimation. Also, you can't aggregate damages caused by different accidents during the policy year and make one claim. Only damages for the most recent accident that has been intimated to the insurance company will be paid for. The rest of the damages will be considered old and claims for them will be rejected.
Don't misrepresent facts
When you buy any type of insurance, you are required to fill a proposal form and make declarations and disclosures. In case a material declaration (that changes the premium or the risk profile) is proven to be incorrect, insurers can decline your claim. A classic case is when information regarding claims in the previous year is not disclosed correctly. Insurers can easily validate details from your earlier insurance company and decline the claim on the basis of proven misrepresentation.
Insurers charge additional premium for CNG or LPG installations. If you have not informed the insurer about an external CNG or LPG installation and hence paid a lower premium, and the damage is caused due to the installation, your claim will be denied on the ground that you omitted a material fact.
Don't depict an accident incorrectly
When you are making a claim, you are required to provide a detailed description of the accident and its cause. Claim surveyors assess the loss based on the cause of the accident described by the customer in the claim form. If the surveyor does not find a link between the cause described by you and the damage, the insurer could refuse your claim.
Do not allow your dealer or agent to fill your claim form. Always ensure that all communication with the insurer, including details in the claim form about the accident and damage, are filled by you and are true, detailed and accurate. This is essential for a clean settlement.
Don't begin repairs before intimation
According to the standard claims procedure, insurers require assessment of the damage or loss before any repair work is carried out. They, therefore, get surveyors to visit personally, examine the damage, review the paper work and assess the loss before the repair work can begin. If you get the car repaired in a hurry without an intimation and survey, and make a claim subsequently, the insurer is bound to reject your claim.
Thus, bona fide holders of car insurance need to understand the rules regarding making a claim. If they flout any one of them, they will suffer the consequences.
The author is director-health, life and strategic initiatives, Coverfox.com TEN MISTAKES THAT CAN PROVE COSTLY
Don't violate Motor Vehicles Act
You may have a perfectly valid insurance policy, but your claim will not be honoured if you have violated any law when the accident occurred. For instance, if you or your driver's driving licence was invalid at the time of claim, the insurer will reject your claim. In fact, if you had given your car for use to a friend or family member who did not have a valid driving licence, and the car got damaged, your claim will be declined. Similarly, damage caused while driving under the influence of any intoxicant or alcohol will not be payable.
If you have hired a driver for your car, ensure that you keep a copy of his driving licence, photo ID and address proof with you always. In case there is a major accident, your driver may disappear, leaving you high and dry.
The law also stipulates that you cannot use a private vehicle for commercial purposes. Insurers treat private and commercial vehicles differently, which is evident in their pricing. If you use your private car for commercial purposes, your damage claim will be rejected if your car meets with an accident.
Don't damage vehicle through negligence
Insurance companies do not pay for what is perceived by them as gross negligence on the part of the driver or owner. If you park your car in an area very close to a building that is under construction, despite there being a warning sign, and your car gets damaged, the insurer may deny your claim citing negligence.
Similarly, you may have to forfeit your insurance claim if you continue to drive your car after it was damaged in an accident, causing further consequential damage to it. Say, you accidently run your car over a large stone and damage the underbody or the front of the car, it is advisable to immediately stop driving the car to avoid damaging the engine. Any harm caused to the engine due to continued driving in such circumstances will be treated as consequential damage by the insurance company and it will not pay your claim.
If your vehicle is stolen, insurers will demand the original car keys when you make a theft claim. In case you have lost your original car keys, insurers are known to decline such claims, citing gross negligence.
Establish ownership clearly
As a fundamental principle, insurers need to establish ownership or financial liability on the car with the policyholder to be able to insure the vehicle under his name and hence pay claims. If the car has been sold, it is important that the transfer of ownership is recorded at the Regional Transport Office, and the insurer is informed so that the required endorsement on the policy is issued. In case you are the buyer, you must not drive or take active possession of the vehicle till the paperwork regarding transfer gets completed. In case an insurance claim arises before ownership has been transferred and recorded, the insurance company will neither pay the claim to the preceding owner nor to the new owner as ownership is not clearly established.
Intimate damage immediately
According to policy terms, you need to notify your insurer immediately after an incident. Generally, you can't make a claim for a damage that is more than two weeks old, unless you have a valid reason for the delay in intimation. Also, you can't aggregate damages caused by different accidents during the policy year and make one claim. Only damages for the most recent accident that has been intimated to the insurance company will be paid for. The rest of the damages will be considered old and claims for them will be rejected.
Don't misrepresent facts
When you buy any type of insurance, you are required to fill a proposal form and make declarations and disclosures. In case a material declaration (that changes the premium or the risk profile) is proven to be incorrect, insurers can decline your claim. A classic case is when information regarding claims in the previous year is not disclosed correctly. Insurers can easily validate details from your earlier insurance company and decline the claim on the basis of proven misrepresentation.
Insurers charge additional premium for CNG or LPG installations. If you have not informed the insurer about an external CNG or LPG installation and hence paid a lower premium, and the damage is caused due to the installation, your claim will be denied on the ground that you omitted a material fact.
Don't depict an accident incorrectly
When you are making a claim, you are required to provide a detailed description of the accident and its cause. Claim surveyors assess the loss based on the cause of the accident described by the customer in the claim form. If the surveyor does not find a link between the cause described by you and the damage, the insurer could refuse your claim.
Do not allow your dealer or agent to fill your claim form. Always ensure that all communication with the insurer, including details in the claim form about the accident and damage, are filled by you and are true, detailed and accurate. This is essential for a clean settlement.
Don't begin repairs before intimation
According to the standard claims procedure, insurers require assessment of the damage or loss before any repair work is carried out. They, therefore, get surveyors to visit personally, examine the damage, review the paper work and assess the loss before the repair work can begin. If you get the car repaired in a hurry without an intimation and survey, and make a claim subsequently, the insurer is bound to reject your claim.
Thus, bona fide holders of car insurance need to understand the rules regarding making a claim. If they flout any one of them, they will suffer the consequences.
The author is director-health, life and strategic initiatives, Coverfox.com
- Driving a car without a valid licence or hiring a driver who doesn't have one
- Driving under the influence of alcohol
- Using a private vehicle for commercial purposes
- Parking your car close to an under-construction building
- Driving the car after it was damaged in an accident
- Buying a used car but not getting ownership transferred at the RTO
- Delay in informing insurer about damage to your car
- Making incorrect declarations about claims in previous year
- Failing to inform insurer about CNG or LPG installation
- Getting the car repaired before survey has been done