Reasons why car insurance claims can be rejected
December 7, 2017
It is a sad fact of life that every year thousands of vehicle insurance claim rejection incidents occur because policyholders have failed to read and meet all the stipulations in their contracts.
It goes without saying that drunk drivers involved in an accident will not be rewarded by their insurance companies. A claim rejection is mandatory is these cases. In fact, insurance firms reject such claims out-of-hand.
But sadly, small oversights can end up in the claim rejection bin despite diligent monthly premium payments.
Insurance companies are quick to punish policyholders for breach of contract, but whether they are as thorough in checking that their clients meet all the conditions of the contract before premiums payments begin is debatable.
Here are examples of oversights that can cost motorists dearly.
Some Common Oversights Leading to Claim Rejection
Failure to include write-off cover: Ensure that there is write-off cover in the conditions of the contract otherwise insurance companies are not liable to replace vehicles written-off in accidents.
Failure to undertake vehicle inspection: Most companies insist on a vehicle inspection when applicants seek insurance cover. This is to ascertain the condition of the vehicle at the date of the inception of the policy. Failure to do so is a breach of contract and the company will reject any claim.
Private vehicles used for business. Private individuals insure most of the vehicles on the road. Insurance companies will cover claims if accidents take place while travelling to and from work. However, it will reject claims if the claimant was using it for work.
Out-of-date premiums: Unpaid premiums are a primary cause for rejected claims. Policyholders must ensure that they pay premiums by the due date every month.
Unspecified or unlicensed drivers: Generally, only the policyholder has cover in the event of an accident. To safeguard against rejected claims another driver, such as a spouse, should be specified in the contract. Obviously, drivers who do not have a driver’s licence will not have cover under any vehicle insurance policy.
More Uninentional Oversights
Unroadworthy vehicles: If a post-accident inspection by an insurance assessor uncovers any condition of a vehicle that is “unroadworthy”, the insurance company will reject the claim. These could be relatively minor flaws such as faulty windscreen wipers or tyres with insufficient tread.
“Telematics”: Telematics are devices that track and recover stolen vehicles, and also monitor driving habits. If the vehicle has such devices then insurance companies reject claims if the driver was driving recklessly.
Failure to fit tracking and security devices: If insurance cover is conditional on the installation of satellite tracking devices, alarms and immobilisers, then the insurance company will reject the claim will if the policyholder has failed to comply with this stipulation.
Unsafe parking: Motorists usually state that their vehicles are kept under lock and key at night, or in a secure parking area. But insurance companies will reject their claims for theft if the insurance company discovers this to be untrue.
Simply by following these rules-of-thumb, motorists will be safeguarded against insurance claims being rejected.
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All info was correct at time of publishing