Auto insurance is a mandatory investment under the law. Therefore, a large number of car owners choose to pay a premium for an auto insurance policy to protect their cars from a potential collision. However, despite this, the companies reject most of their claims. This is because people are unaware or rather ignorant of the complexities related to auto insurance. Therefore, a large portion of auto insurance claims are denied. To prevent this from happening, let’s review a list of reasons why a car insurance claim could be denied:
1. Intimidate your insurer late or not: Please note that your claim is bound to be rejected if you do not inform your insurance provider within the stipulated time. On average, you should update your insurance company within 48 to 72 hours of the time of the accident or collision.
2. Driving under the influence of alcohol or any other drug – This is a no-brainer, but most people are negligent about it. If you are driving 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 being used for business purposes: If you have a private car and it is being used for any business use, such as to transport goods or passengers, your car insurance provider may deny your claim. This is because there are different policies for private car and commercial vehicle policies.
4. If you drive without a valid license: In the event that you or someone who drives your car has a valid driver’s license and you are faced with an accident, your coverage will be void. Therefore, be sure to renew your license on time.
5. Begin repairs before insurer inspection: When you report the collision or accident to your insurer, an inspector 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. Do not transfer the policy from the previous owner: There will be some verification during the claim process. In case the auto insurance policy is not in your name, your insurer has the right to reject your claim.
7. An electrical or mechanical breakdown: In case your car is damaged without any external collision due to some electrical or mechanical breakdown, then it is not covered by your auto insurance policy. In this case, you will have to fork out some money from your own pocket.
Be more careful about all of these reasons next time, and be sure to get the most out of your auto insurance policy.
