IMPORTANT: Reasons why your car insurance claim may be rejected

Reasons why your car insurance claim may be rejected

You have insured your car, then it is maybe stolen or damaged, you place a claim which is then rejected. We at Placid Insurance agency have here in compiled some of the reasons why  car insurance companies may reject a claim.

It is disturbing when your vehicle is damaged and even more painful when your insurer refuses to compensate you because your policy doesn’t cover for what caused the damage. This is so because Insurance protects people against unexpected events and that are stated in the policy.

However, circumstances do happen when an insurer refuses to settle a claim because of an omission or breach of policy condition. Even when insurance protects you even from a loss that may have been caused by your own negligence, it will however not cover for gross negligence. For example, when the insurer can confirm that you deliberately ignored a situation knowing very well that a loss was likely or probable.

Reasons why your insurance claim may be rejected  

Driving under the influence of alcohol or drugs – Motor insurers will not agree to pay out if the loss occurred when you were driving under the influence of alcohol or been tested positive for misusing drugs. Some insurers further reject a claim if the person you lend your car to was under the influence even if you had no idea.

Suspended or cancelled license – Your insurer will not compensate you if they find out that you do not have a valid driver’s license at the time of the accident. Insurers will consider this as you contravening the law and insurance does not cover for any illegal activity. Some insurers will go further and reject a claim if a person you lend your car to is unlicensed even if you didn’t know it.

Allowing a friend to drive a vehicle – If you allow a friend or anybody to drive your car without informing your insurer, you may end up footing the bill for an accident. This is because some insurance providers restrict driving to nominated drivers.

You MUST report accidents

Failing to report an accident to the traffic police within 24 hours after you are involved in an accident or if your car has been stolen may lead to your claim being rejected. 

Not taking your car for inspection, or if you are insuring a newly acquired or used car or have decided to change insurance companies you need to take your car for inspection. They need to see that your vehicle exists and is not damaged. Failure do this, your claim may be rejected.

Failing to install security devices on your car may lead to claims rejection but this is limited to some and not all insurers. Some insurers will not compensate your loss if you haven’t installed the standard security devices in your vehicle that they require, like an alarm and immobilizer or a tracking and recovery system. 

Car modifications can lead to claim rejections

Car modifications: You may be required to inform your insurer whenever you modify your car to change its performance. Insurers need to know for example, when you have modified the engine because this may affect the rate that is charged. If you have for example installed a new sound system, mags or other accessories, these may not be covered unless you advise first.

Driving across borders: Some insurance providers may not cover for loses occurring when you drive beyond the territorial limits stipulated in your policy. Most insurers will only cover you within the Kenyan boarders and within the immediate surrounding countries. If you plan to drive out of the territorial limits of your policy you need to have cover extended for where you are going.

Using a vehicle for business purposes: Confirm with the “use description” that apply to your vehicle carefully because insurers differ in their user descriptions and you may not have the cover that you think.

 For instance Private Use may include driving to and from work and attending to the infrequent meetings but some wordings do not. The idea here is that you need to be able to get a sense of how far the vehicle will be driven.

Read the fine print when you take out car insurance

The above list is by no means comprehensive – it is very important to read and understand the small print on your insurance policy. Once you have read and understood the policy and you are still not happy about your insurer’s decision not to settle your claim. Wait until you get a policy with terms you side with.