Your car insurance claims got rejected? These common mistakes could be the reason

Buying car insurance can feel like a box-ticking exercise: choose third-party cover, add protection for your own vehicle and renew the policy on time. The real test, however, often comes when you need to make a claim.

Small details such as an expired driving licence, incorrect information in the policy or an attempt to include an old dent in a fresh claim can potentially lead to disputes or rejection.

Consider the case of 23-year-old Chirag Andani from Jamnagar. His Honda City collided with a cow, following which he braked and swerved, hitting an electric pole and stones. The accident damaged both ends of the vehicle, but the insurer rejected his claim, arguing that the damage was inconsistent with the accident described.

Andani approached the insurance ombudsman, which found that the surveyor and investigator had not obtained CCTV footage to establish the car's condition before the accident. The insurer subsequently settled the claim.

The episode underlines a basic rule: document an accident as thoroughly as possible. “It is better to take pictures and videos of the accident site as visual proof,” said Pune-based garage owner Amish Shah.

• Check what you disclosed

Incorrect or incomplete information at the time of buying insurance can become a problem later. Policyholders should accurately disclose previous claims, no-claim bonus (NCB), ownership, vehicle usage and modifications.

“Misrepresentation is one of the biggest reasons for claim rejection. Information that may seem unimportant while buying the policy can become relevant at the time of a claim,” said Narayan Rao, head – Motor Claims, Go Digit General Insurance.

Changes such as a transfer of ownership, altered vehicle usage or significant modifications should also be reported to the insurer.

• Zero-dep does not mean zero out-of-pocket cost

A zero-depreciation add-on reduces depreciation deductions on eligible parts after an accident. But it doesn't cover everything.

Normal wear and tear remains excluded, and policyholders should check which parts and situations are covered under their specific policy.

Consumables such as engine oil, coolant, lubricants, brake oil, grease, nuts and bolts generally require a separate consumables add-on. Engine and tyre protection may also need separate coverage.

• Don't claim every small repair

Making a claim for a minor repair can affect your NCB, potentially making it more economical to pay for the repair yourself.

“If a repair costs ₹8,000-10,000 but retaining the NCB saves ₹12,000-15,000 at renewal, paying for the repair yourself may make sense. But if the claim is ₹50,000, filing it would generally be more sensible,” Rao said.

The decision should therefore be based on the repair cost versus the NCB benefit you could lose.

• Old damage is not new damage

Trying to add previous scratches or dents to a fresh accident claim can jeopardise the entire claim. Surveyors can identify pre-existing damage, according to Shah.

• Buying a used car? Transfer the policy

The insurance policy does not simply become fully valid for the new owner because the car has changed hands. While the third-party component transfers, the own-damage component needs to be transferred to the buyer.

• A stolen car requires quick action

After a theft, file an FIR, inform the insurer and RTO, obtain acknowledgements and submit the required documents, including the original RC and keys. Delays can complicate the process.

• Total loss doesn't mean the salvage has no value

If a vehicle is declared a total loss, its salvage retains value. Depending on the insurer's process, the customer may opt for assisted disposal or take responsibility for disposing of it.

• Third-party insurance isn't personal accident cover

Third-party insurance protects against liability towards others. Own-damage cover protects your vehicle. Neither should be confused with personal accident (PA) cover for the owner-driver.

The standard owner-driver PA cover is ₹15 lakh, with a mandated one-year premium of ₹750, according to insurance expert Deepak Yohannan.

The takeaway is simple: motor insurance is not an all-purpose shield against every expense involving your car. Before renewing a policy, check its exclusions, add-ons, documentation requirements and claim conditions. Keeping those details updated can save considerable time—and money—when an accident actually happens.