Just because you have car insurance doesn’t mean that you’re going to get a pay out in the event of a road accident- there are a whole bunch of reasons why car insurance companies might deny claims. Mainly, car insurance companies want to avoid fraud, but they also want to make sure that you keep to the terms and conditions of your policy. So if you want to avoid getting your insurance claim rejected, here are the top reasons that companies deny insurance claims.
1. You Weren’t Paying your Car Insurance Premiums
It sounds simple, but one of the biggest reasons that car insurance companies deny claims is that the person insured didn’t keep up with their payments. If you don’t pay your monthly premium on time every month, then you might find that you lack coverage when you actually need it.
2. The Driver or Car Aren’t ‘In Order’
Generally, an insurance policy covers a named driver (or drivers) and a certain car in a certain condition. If the driver during a car accident wasn’t the driver named in your policy, then your claim will be denied. Similarly, if your car wasn’t the one named in your policy your claim will be denied. Not only that, but many policies state that the car must be in roadworthy condition, which means that if you’re not keeping up with your car maintenance schedule you might not get your pay out – in these cases there is usually a connection between the state of the car and the cause of the accident or insurance event – but why take the chance? Having a roadworthy car is in your benefit.
3. You Didn’t Disclose Information to Car Insurance Companies
When you fill out an application for vehicle insurance you’ll find that insurance companies ask for a lot of information. They don’t just want to know your name and age, you’ll be asked about prior insurance record, your driving record, your credit history and your health history. Failure to be up front about any of the issues you’re asked about can result in your policy becoming invalid, even if you’re paying premiums. The lesson? Be honest!
4. Driving Recklessly
Here’s a bit of a difficult one: some car insurance companies will include a statement called a “failure to take care” clause. This means that if the company can prove that you were driving recklessly (you missed a road sign, for example, or were driving too fast for conditions) then they don’t have to pay out on your claim.
5. Your Vehicle wasn’t Secured
Even if you weren’t in a road accident, and say your car was ‘only’ stolen, that still doesn’t mean that you’re on safe ground. Many insurance policies state that you must take adequate security precautions, which means that if your car isn’t stored in a garage, or you don’t have something like a clutch lock, the company may deny your claim, saying that you didn’t actually have the security measures that they requested (and you agreed to) or that you stated that you have but in fact didn’t. Of course, it is smart to add security measures because this will both help protect your car and help reduce the price of your monthly premiums (see more about reducing your car insurance costs).
6. Your Policy is a Total Loss Policy
Not all car insurance policies are the same, and a total loss policy isn’t a general insurance policy. If your policy is total loss policy it means that the insurance company only gives a pay out if your car is completely destroyed (this doesn’t necessarily mean your car is a match box, but rather that it is beyond repair). They don’t have to pay for the damage, and they don’t have to get your car repaired. You’ll need to read the terms and conditions of your policy carefully to ensure that you have coverage for all kinds of accidents, and beware of cheap car insurance policies, which tend to be total loss only.
7. Telematics Say It Was Your Fault
It’s becoming more and more common for car insurance companies to demand that a telematics device is fitted to your car. This device will record driving data, and after an accident can be used to prove that you weren’t driving as safely as you thought. If the telematics data says that you were at fault, your insurance company may very well deny your claim. Privacy you say? Well, many companies offer reduced rates if you agree to add this device and in turn, many people are willing to give up this aspect of their privacy.
8. You Were Driving Drunk
Most car insurance companies will refuse to pay out if the driver was drunk at the time of the road accident. However, do remember that drunk doesn’t necessarily mean that you’ve had ten beers. Just one large drink is enough to put you over the limit, and failing a breathalyzer test can be enough to get your claim rejected.
9. Your Driving is actually your Business
Car insurance companies divide policies into personal and business cover. If you’re only covered for personal use and have an accident while you’re driving as a business (taxi driver or delivery guy, or a salesman that’s always on the road), then you’ll probably find that your claim will be rejected. The simple solution to this is to be up front about what you use your vehicle for. If you drive for work, then make it known to your insurance company.
10. You’re Out of Coverage
In general, a car insurance policy will cover you for up to a certain amount, but that amount is a total amount. That means that if you have a road accident early in the year and claim money, then if you have another accident later in the year the company may deny your claim, saying that you’ve used all your coverage. If you do have an accident, you’ll need to re-check your coverage with your insurance company, and will probably find that your premiums go up too. But at least that means there’ll be more coverage there if you have another accident.
Car insurance companies do deny claims, sometimes rightfully. It’s up to you to read through the terms and conditions of your vehicle insurance policy and make sure that you keep to them. However, if you do feel that an insurance claim has been denied unfairly, you can file a complaint with the car insurance ombudsman, an objective body that reviews insurance claims. The best way to avoid claim rejection, however, is to know your insurance policy and abide by it. In this case, it really does seem that “honesty is your best policy.”
Main Subject: Car insurance companies
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