Page 42 - The Insurance Times March 2025

FAQs

Common Reasons for Rejection of Motor Insurance

Claims in India

1. Why are motor insurance claims rejected in intoxicated or under the influence of drugs at the time
India? of the accident.
Motor insurance claims may be rejected due to reasons
such as: 6. How do unauthorized modifications affect
Policy Lapse: The insurance policy was not active at claims?
the time of the incident. Modifications to the vehicle that are not declared to the
Unlicensed Driving: The driver did not hold a valid insurer can lead to claim rejection. For example, adding
driving license. a CNG kit without informing the insurer may void claims
related to its failure or damage.
Policy Exclusions: The incident falls under exclusions,
such as wear and tear or mechanical breakdown.
7. What role does policy exclusion play in claim
Intoxication: The driver was under the influence of rejection?
alcohol or drugs at the time of the accident.
Policy exclusions specify scenarios where the insurer will
Unauthorized Vehicle Use: Using the vehicle for pur- not cover damages, such as:
poses not covered by the policy, such as commercial Wear and tear.
use of a private vehicle.
Mechanical or electrical failures.
2. How does driving without a license affect a Damages incurred during illegal activities. Claims
motor insurance claim? arising from such scenarios are rejected.
Driving without a valid license is a violation of policy
terms. If the driver involved in the incident does not 8. Are claims denied for delay in intimation?
possess a valid license, the insurer is likely to reject the Yes, failing to inform the insurer about the incident within
claim. the specified time frame can lead to claim rejection.
Most insurers require immediate or timely notification
3. What happens if the policy has expired? of an accident or theft.
If the insurance policy is not renewed before the date of
expiry, it becomes inactive. Any claim made during the 9. How does incomplete documentation affect
inactive period will be rejected. claims?
Claims may be rejected if required documents are miss-
4. Can claims be rejected if the vehicle is used ing or incorrect. Common documents include:
for commercial purposes? FIR (in case of theft or major accidents).
Yes, if a private vehicle is used for commercial purposes Driving license.
or any activity not covered by the policy, claims arising
Policy copy.
from incidents during such use can be denied.
Repair bills.
5. Does driving under the influence lead to
claim rejection? 10.Can fraudulent claims lead to rejection?
Yes, claims will be rejected if the driver is found to be Yes, any attempt to inflate the claim amount, fake dam-

38 March 2025 The Insurance Times