Rejections and exclusions in car insurance

It is often noticed that car owners often do not know what is covered and what is not covered by their car insurance policy, so when the insurance company rejects their claim fully or partially, these owners are disappointed not knowing why the insurance company did not pay up what they had expected. There are many reasons why an insurance company summarily rejects the claim or pays up only partial amount of damage.

A typical car insurance policy will have the following exclusions and exceptions:

·       Normal wear and tear of the vehicle

·       Depreciation in the value of the car due to ageing

·       Electrical or mechanical breakdown

·       Damage caused to the vehicle by a person driving without a valid driving licence

·       Damage caused while driving the vehicle under the influence of alcohol, drugs, narcotic substances or other banned substances

·       Damage to tyres and tubes

·       Loss or damage to the car caused by war, mutiny or nuclear risk

Therefore, in the event of any damage or loss due to any of the abovementioned reasons, the insurance company is not liable to honour any claims against it.

Apart from the above exclusions, there are other grounds on which the insurance company can reject any claim partially or fully. Some of these reasons are:

·       Not filing the claim within the stipulated time after the occurance of event resulting in the damage or getting the damages repaired before filing the claim.

·       Any consequential loss or damage resulting from the actions of the insured (whether intentional or otherwise) and which is not an outcome of the event resulting in damage.

·       Depreciation on plastic/rubber parts and tyre, etc. is not covered by the insurance company if the policy does not have zero-depreciation add-on.

·       Damage to electrical accessories in the vehicle is not paid for by the insurer if these are not covered specifically by an add-on to the policy.

·       Damage caused to the engine while driving through a water-logged area is not covered if the policy does not have an engine protector add-on.

All the above exclusions and exceptions are not covered by the insurance policy, unless one buys a comprehensive insurance policy that extends cover to all the above damages or buys add-ons to provide cover for such damages.