This is why your car insurance claim could be rejected
Have you ever been in a situation where you had to claim from your car insurance and the claim was rejected? Here’s how you can avoid it.
Your car insurance claim can be rejected and cause you large financial losses if you have to pay for damage to another car, have your own car repaired and in some instances, even still repay the bank for financing your car.
Consumers buy insurance to protect their assets in case something unforeseeable happens to ensure that they would not need to worry about the financial implications or cost of replacing their cars. However, the rejection of a claim or cancellation of a policy by an insurer can result in further financial strain and frustration, Yulanda Paterson, head of specialist division and online at Infiniti Insurance, says.
“You must be aware of circumstances that can result in your insurer declining to pay out a claim. Insurers can validate a claim based on independent witnesses, expert evidence, vehicle tracking data, bank statements, cell phone records, medical records, police reports and call recordings.
“Remember that the insurer is only liable to pay you if your claim falls within the scope of the cover provided in the policy wording.”
When your car insurance claim will be rejected
Paterson says your claim can be rejected when:
- The insurer finds out that you were driving recklessly or driving under the influence of alcohol or without a valid driver’s licence at the time of the accident.
- You withheld or misrepresented information when taking out the policy or when you lodge a claim. The Office of the Ombudsman for Short-Term Insurance (Osti) reports that it receives many complaints about policyholders misrepresenting the ‘regular driver’ to pay a cheaper premium or lower excess.
- You fail to provide complete and accurate information to your insurer to underwrite the policy appropriately.
- Provide incorrect or inconsistent versions of the events leading up to or during an incident, such as inflating claims or refusing to give insurers access to information that could have a material effect on the outcome of the claim.
- You breach a contractual duty of care, for example, failing to maintain or replace the worn-out tyres. The clause requires that you must use all reasonable care and take reasonable precautions to prevent or minimise loss, damage, death, injury, or liability.
“Consumers must review their policies regularly to familiarise themselves with the terms and conditions. You must check your policies to ensure you have the correct cover in place and update your details and inform your broker or insurer of any changes in your circumstances since you took out the policy. This initiative-taking approach will help consumers to be aware of what is covered and what to do if they need to submit a claim,” Paterson says.