Individual or commercial, a vehicle can move on roads only with an insurance that is in effect. Motor insurance saves financial crisis in case of any untoward accident. While most don’t care about motor insurance, we shall go through the types, the reason behind rejection of insurance, action plan in such instance and the general frauds in this sector.
There is an estimation that around 4 lakh people are hit by accidents in India per month and surveys say that this is increasing at the rate of 4% per year. While bad roads are the main reason, cyclones and earthquakes also cause damage to the vehicles. Vehicle, an integral part of our life, needs insurance to face any crisis.
Based on their nature, there are two types of insurances.
Damage to a third party…
According to motor act, every vehicle must have a third party insurance and no vehicle can be used without it. this policy provides compensation in case of damage to others or other properties due to the vehicle. There is provision to get compensation if any other person gets injured from the vehicle in an accident. But this policy doesn’t cover the owner of the vehicle or the vehicle itself.
Comprehensive policy gives complete coverage of insurance that gives complete insurance to the vehicle, its owner, others traveling in the car. However, know about the coverage areas before taking a policy. The policies keep changing from company to company. Especially, have knowledge about coverage to spares, mechanical faults, depreciation, etc.
When a car is involved in an accident, this causes severe trauma to the owner emotionally, he may get injured, car may get severely damaged and if the insurance company denies compensation, this is a death knell to the owner. There may be no proper reason for denial very rarely and most of the times there is.
The general reasons behind denial….
Some people get repairs done on their after the accident and approach the insurance company later. This may result in denial. The fuel should be disclosed while taking the policy and if you fit CNG/LPG after some time, this should be duly informed else claim may be denied.
To drive a vehicle, a proper driving license is a must. If the driver of the car during the accident doesn’t have a proper driving license, the insurance company will deny the claim. Some people use personal vehicles for commercial purposes in which case, insurance will be denied.
Information about the accident should be done within 48 to 72 hours or else claim may be rejected.
Claim will be rejected if the car is parked in a no parking area or carrying more than permitted number of passengers.
There is no scope for claim compensation in case the driver is driving under the influence of alcohol or other substances.
Policy has to be renewed in time and there is no extension even for a second. Insurance company will not be responsible for any damages that occur after the insurance period, so always have the insurance renewed in time.
It is the responsibility of the owner to protect the insured vehicle. Insurance company may object for claim if it finds neglect on your part while protecting the car from theft or any things inside it. It may cut any amount of the claim that has no proper receipts.
The company will deny claim if the accident happens outside the policy coverage area geographically. Per IRDA, there are two geographical areas in India. Zone A has Delhi, Mumbai, Kolkata, Chennai and other metro cities and zone B has all other areas. Check if the policy has the coverage pan India or any limitations before taking it.
Some tend to do intentional frauds to get insurance policy claim. For example, fitting a number plate of a insured vehicle to the one that has no insurance, submitting false documents, intentional application for claim from a third party, and forged driving license etc. Changing drivers is also observed. There are people who claim even there was no damage apparent. Taking two policies for the same vehicle is also considered a fraud. Some tend to hide how he accident really happened. but, insurance companies are now looking everything under the microscope and have their own arrangements to recognize any such mal practices. In case of need for claim, see that you are not hiding any truths and submitting only original documents.
If you feel that your claim has been denied without proper reason, you can always approach ombudsman. There is not much of a paper work and you don’t any help from the experts even. You can present your case yourself. You have to approach the ombudsman within 30 days of claim denial.