Top Reasons Why Two-Wheeler Insurance Claims Get Rejected

by SMCIB on Sunday, 11 June 2023

Top Reasons Why Two-Wheeler Insurance Claims Get Rejected

A two-wheeler insurance policy provides a sense of security and peace of mind, ensuring that you are financially protected in case of unfortunate events. Thus, you pay the premiums dutifully, believing that the coverage will come to your aid during times of need. However, the harsh reality is that even with the best efforts put forward, your insurance claim might get rejected due to certain circumstances.

In a customer's journey, the claim settlement process holds immense importance. To navigate this successfully, it is important to know the potential reasons behind claim rejections. This will help you prevent complicated situations in the future.

In this article, let us explore why two-wheeler insurance claims can get rejected.


First, What Is A Claim?

A claim is a formal request you make to your insurance provider, asking for financial help in cases of unfortunate events. Once your claim is approved, the insurer will cover the expenses incurred due to the accident or mishap. You must inform your insurance provider about it promptly, as any delays might create unnecessary disputes at the time of claim.

You can raise a claim in two ways -
?Cashless Claim
If you get your bike repaired in a workshop or service centre that is on your insurance provider’s network, the repair expenses will be directly settled by your insurance provider. This means that you will not have to bear the cost of repairs - making the process convenient and hassle-free.

?Reimbursement Claim 
If you choose to get your bike repaired at a garage that’s not on your insurance provider’s network, you need to pay for the repairs upfront. Once the repair is done and you have settled the bill, you can make a reimbursement claim to your insurance provider. The insurer will then reimburse you for the costs you’ve incurred. This is called a reimbursement claim.

Regardless of whether it is a cashless or reimbursement claim, it can be denied due to many reasons.


Top 10 Reasons Why A Claim Can Get Rejected

Here are some of the common reasons why the insurer might not accept your claim request -
?Raising Fraudulent Claims
Insurance companies do not accept fraudulent claims. So, when you file a claim, the insurance company does not immediately provide you with financial help. They investigate your claim request. If your claim is found to be legitimate, they provide you with the claim amount. However, if there are any inconsistencies in the claim request, it might get rejected. For instance, if there are any intentional damages to your vehicle, etc.

?Drunken Driving
Drunken driving is against the law, and it is important to know that insurance companies do not cover any claims made for accidents or mishaps caused while a person is driving in an intoxicated state. For example, Mansi consumed alcohol while attending a party at a friend's house. Though intoxicated, she chose to ride her scooter home. On her way, she met with an accident that damaged her scooter. Since she owned two-wheeler insurance, she filed a claim. However, the insurance company rejected her request since she was under the influence of alcohol when the accident happened.

?Invalid Licence
As per the law, having a valid driving licence is mandatory when riding a two-wheeler. And your insurance provider will not be liable for any losses you incur while riding without a valid driving licence. This means that the insurer will reject your claim in such a situation - leaving you with significant financial burden.

When you make changes to modify your two-wheeler, it is essential to inform your insurance company and have them officially documented in your policy. Failing to do so will have consequences - your insurer might refuse to cover your damages in the event of a claim. This means that if your vehicle is damaged due to such modifications, you will have to get it repaired yourself.

For instance, Alex is a passionate motorcyclist who decides to upgrade his two-wheeler with a powerful exhaust system. After the modification, he continues riding his bike without informing the insurance company. One day, unfortunately, he meets an accident that damages the exhaust. If he raises a claim to his insurer, the damages won’t be covered, since he didn’t inform them about the modification.

? Delay In Claim Intimation
As mentioned previously, it is crucial to inform your insurance company promptly about the damages caused to your bike. Delaying the intimation of your claim could result in claim rejection. However, if there is a genuine reason for the delay in notifying the insurance company, the insurer will need you to provide relevant supporting documents. These documents will help establish the authenticity and validity of the reasons behind the delay.

?Repairing Your Two-Wheeler Without Intimation
In the event of an accident, it is crucial to inform your insurance company immediately. If you proceed with repairing your two-wheeler without notifying the insurance company, they might deny your claim request. So, ensure you notify the insurer immediately in the event of an accident. The insurance company will then appoint a surveyor to assess the damages to your two-wheeler. Once the inspection is done and the surveyor gives their approval, you can proceed with getting your two-wheeler repaired.

?Consequential Damages
It is important to note that insurance coverage is typically provided for unforeseen accidents or damages. If you drive your bike despite being aware of the existing damages, your insurer will not cover any additional damages that occur. Such claims might get rejected right away. Thus, to ensure proper coverage and avoid claim rejections, address the existing damages promptly and refrain from riding a bike that is already damaged.

?Claims Raised After Policy Expiry  
Every insurance policy has an expiry date, and it is important to renew your policy annually to ensure continuous coverage. If you fail to renew your policy and encounter an accident during that period, the insurer will not cover your losses. Therefore, it is essential to stay mindful of your policy’s expiration date and renew it on time.

?Name Mismatch
The name mentioned on the Registration Certificate (RC) and insurance policy copies must be the same. In case there is a mismatch between the name on the RC and the policy, your claim can get rejected without further consideration. To avoid such complications, it is necessary to carefully review your policy documents and verify if there are any errors in your name. And, if you buy a secondhand vehicle, get the documents transferred to your name and make the necessary changes to your policy documents accordingly.

If an accident involving your two-wheeler occurs due to your negligence, the insurance company will not entertain your claim. It is important to note that insurance coverage is intended to protect against unforeseen events and not situations that are caused by a lack of proper care.

For instance, Uday resides in an area that is theft prone. Despite being aware of this, he parks his two-wheeler at an unsecured location. And the next day, his two-wheeler gets stolen. In case Udhay files a claim, the insurance company will reject it, stating his “negligent act” as the reason.


Winding Up!

We've reached the end. So, these are some of the possible reasons for claim rejection. To avoid any disputes or disappointing outcomes during the claim process, it’s important to take extra care, whether it’s the documentation, any modifications you make to the vehicle, policy renewal, and so on.

Insurance Knowledge Videos