7 scenarios where a car insurance claim can be rejected

Car insurance is a mandatory investment by law. A large number of car owners therefore choose to pay a premium for car insurance to protect their car against a possible collision. Despite this, a majority of their claims are rejected by companies. This is because people are unaware or rather ignorant about the intricacies of auto insurance. That is why a large proportion of auto insurance claims are rejected. To avoid this, let’s go through a list of reasons why an auto insurance claim might be denied:

1. Notifying your insurer late or not at all: Keep in mind that your claim is destined to be rejected if you do not notify your insurance company within the specified time frame. On average, you should update your insurance company within 48 to 72 hours from the time of an accident or collision.

2. Driving under the influence of alcohol or other drugs: This is a good idea, but most people are negligent about it. If you drive while drinking alcohol, you are not only breaking the law, but even your insurance company is refusing to provide coverage in the event of an accident.

3. If your car is used for commercial purposes: If you have a private car and it is used for commercial use, such as transporting goods or passengers, your car insurer may reject your claim. There are different policies for private cars and company cars.

4. If you drive without a valid driver’s license: If you or someone driving your car has a valid driver’s license and has an accident, your coverage will be void. Therefore, make sure to renew your license on time.

5. Begin Repair Before Insurer Inspection: When you notify your insurer of the collision or accident, an inspector will visit you to inspect the condition of the vehicle and verify your claim. Without this inspection, the insurance company will not be able to track the extent of repairs and estimate the cost. Therefore, your claim is doomed to be rejected.

6. Failure to transfer the policy from the previous owner: There will be some verification during the claim process. If the auto insurance is not in your name, your insurer has the right to deny your claim.

7. An Electrical or Mechanical Breakdown: If your car has suffered damage without any outside collision due to an electrical or mechanical breakdown, you will not be covered by your car insurance policy. In this case, you will have to pay some money out of your own pocket.

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Next time, be more careful with all of these reasons and make sure you make the most of your auto insurance policy.