The Top 10 reasons why Car Insurance does not pay out
According to the Ombudsman for Short Term Insurance, the following instances reflect the Top 10 reasons why car insurance claims are rejected:
Why Car Insurance Claims are rejected:
1 DUI or Driving under the influence
Claims of drivers that were involved in an accident while under the influence of alcohol are summarily rejected.
2 Unlicensed driver
Claims of unlicensed drivers are not paid out.
3 Reckless Driving
The term reckless driving includes speeding, violation of road traffic regulations, high-risk driving and careless driving. If proof exists that the policyholder was guilty of any of the aforementioned traffic violations, the claim could be thrown out.
4 Driver not the “Designated” or “Regular” driver
If the designated or regular driver, as specified in the car insurance policy, was not the driver at the time of the accident, the claim may be rejected. Numerous claims have been declined because of this reason. Insurance Providers state that policyholders tend to specify themselves as the regular driver, instead of the younger driver who actually drives the car most of the time. The main reason is that younger drivers pay higher insurance premiums.
5 Vehicle not roadworthy at time of accident
The Insurance Provider will conduct an investigation regarding the state of the car and if a vehicle is found to have been not roadworthy at the time of the accident, the claim will be rejected.
The following may cause a vehicle to be classified as not roadworthy:
• Faulty steering and steering gear
• Defective brakes and braking systems
• Tyres without enough tread
• Faulty exhaust systems
• Seatbelts and seatbelt anchorages not working
• General condition of car does not comply with roadworthy standards (corrosion, suspension etc)
6 Vehicle inspection
Most Insurance Providers require an inspection of a vehicle before the policy is activated. This is to satisfy the Insurer that pre-existing damage to the car in question is not claimed for later. If the car was not inspected, the Insurance Provider may reject the claim.
7 Private vehicle used for business
Insurance Providers specifically ask whether the vehicle will be usd for social and domestic purposes or for business. Non-disclosure of the fact that your car may be used for business purposes may result in rejection of your claim.
8 Non-secure overnight parking
If the Insurance Provider was under the impression that your car will be parked in a locked garage at night and it was stolen or damaged whilst being parked out on the street, chances are that your claim will be denied.
9 Unsatisfactory security precautions
A number of Insurance Providers insist that vehicles certain should be fitted with a specified security device. Your car insurance claim may be rejected if you did not comply to this specification.
10 Not covered by policy
A number of claims are rejected because the policyholder was under the impression that he was covered for something when in fact the policy states otherwise.
Tip: Read your policy through carefully and be aware of any exclusions. Study the Terms and Conditions and ensure that your car insurance is paid up to date.