Common Reasons for Motor Insurance Claim Rejection
Insurance is meant to provide peace of mind, but claims may be rejected if policy conditions are not followed. For sales agents, explaining these reasons upfront helps manage expectations and avoid disputes later.
🚫 1. Driving Without a Valid Licence
The policy only covers drivers with a valid driving licence.
Claims are rejected if:
The driver had no licence.
The licence expired or was invalid for that vehicle type.
👉 Example: A person with a two-wheeler licence drives a car and crashes → claim rejected .
🚫 2. Driving Under Alcohol or Drug Influence
Claims are not payable if the driver was under the influence of liquor or drugs at the time of accident .
🚫 3. Using the Vehicle Beyond Permitted Use
Private cars used as taxis, or vehicles used in racing/rallies are not covered.
👉 Example: A private car hired out for paid rides meets with an accident → claim rejected .
🚫 4. Policy Lapse or Break-in Insurance
If a policy has expired, no claims are valid.
If insurance is purchased after damage has already occurred, the claim will be denied .
🚫 5. Fraudulent or Misrepresented Claims
Common frauds:
Insuring already damaged or stolen vehicles.
Multiple insurance covers on the same vehicle.
Inflated repair bills.
👉 Insurers counteract this with vehicle inspection during break-in renewals .
🚫 6. Consequential Loss or Mechanical Failure
Standard OD cover does not pay for indirect damages like engine seizure due to oil leakage or hydrostatic lock (unless Engine Protect Add-On is taken).
🚫 7. Unauthorized Repairs Before Survey
If the customer repairs the vehicle before the insurer’s surveyor inspects, the claim may be rejected because evidence is lost .
🚫 8. Non-Disclosure of Modifications or Accessories
Failing to declare CNG/LPG kits, alloy wheels, or expensive music systems leads to rejection if the modification contributed to the damage.
✅ How Agents Can Help Customers Avoid Rejection
Educate upfront – Explain exclusions clearly during policy sale.
Stress timely renewals – Avoid break-in scenarios.
Promote add-ons – Zero Dep, Engine Protect, NCB Protection reduce rejection chances.
Guide during claims – Advise clients to call insurer first, not rush to repair.
🎯 Conclusion
Most claim rejections are due to avoidable mistakes like no licence, alcohol use, non-disclosure, or late intimation. By educating customers, agents can reduce disputes and build long-term trust.
👉 Pitch line: “Your insurance pays when you follow the rules. Be honest, stay covered, and we’ll stand by you at the time of claim.”