Car insurance is a mandatory investment by law. Therefore, a large number of car owners choose to pay a premium for an auto insurance policy to protect their cars against a potential collision. However, despite this, most of their claims are rejected by the companies. This is because people are unaware or rather unaware of the intricacies related to auto insurance. Therefore, a large portion of auto insurance claims are denied. To prevent this from happening, let’s go over a list of reasons why a car insurance claim could be denied:
1. Informing your insurer late or not informing you: We inform you that your claim is destined to be rejected if you do not inform your insurance provider within the stipulated period. On average, you must update your insurance company within 48 to 72 hours from the time of the accident or collision.
2. Driving under the influence of alcohol or any other drug – This is a no-brainer, but still most people are reckless about it. If you drive when you have consumed alcohol, not only are you breaking the law, but even your insurance company will refuse to cover you in the event of an accident.
3. If your car is used for business purposes – If you own a private car and it is used for any business use, such as transporting goods or passengers, your auto insurance provider may deny your claim. This is because there are different policies for private cars and commercial vehicles.
4. If you drive without a valid license: In the event that you or anyone driving your car has a valid driver’s license and is involved in an accident, your coverage will be null and void. So make sure you renew your license on time.
5. Begin repairs before insurance inspection: When you tell your insurance company about the collision or accident, an adjuster will visit you to inspect the condition of the car and authenticate your claim. Without this inspection, the insurance company will not be able to track the extent of the repairs and estimate the cost involved. Therefore, your claim is bound to be rejected.
6. Not transferring the policy from the previous owner: There will be some verification during the claim process. In the event that the auto insurance policy is not in your name, your insurer has the right to deny your claim.
7. An electrical or mechanical breakdown – In case your car sustains non-collision external damage due to some electrical or mechanical breakdown, then it is not covered by your auto insurance policy. In this case, you will have to shell out some money out of your own pocket.
Next time be more careful with all these reasons and make sure you get the most out of your auto insurance policy.
