Thousands of vehicle insurance claims are either partly or completely rejected by insurers every year. This could be because you didn’t follow the conditions of the policy such as keeping your tyres roadworthy, or because you were doing something illegal like driving under the influence of alcohol. Here are 10 of the most common reasons why insurers could reject your claim.
1. Premiums aren’t up to date
One of the main reasons why claims are rejected is because premiums are not paid on time. The good news is that, by law, insurers must grant consumers a grace period to pay the outstanding premium. This period may not be less than 15 days but could be longer, so check your policy. Paying premiums when they are due is the best way to avoid finding yourself without cover.
2. Non-disclosure or material misrepresentation
You must tell your insurer about previous accidents and claims, and if you have a medical condition such as epilepsy that can affect your driving. If you don’t, when it comes to claim time your insurer can reject your claim on the grounds of non-disclosure.
You also need to keep your insurer up to date on your personal information such as your cell number and address.
3. Unlicensed or unspecified drivers
Some policies only cover the regular driver of the vehicle. Your insurer can reject a claim if someone else has an accident while driving your car or the car is stolen when you are not driving it. Tell your insurer if someone else will be driving your car and give them the driver’s details. And remember, if your car is driven by an unlicensed unsupervised driver, your insurer can reject a claim.
4. Unroadworthy vehicle
If you have an accident and it turns out that your vehicle was not roadworthy, your claim will be rejected. Below are the items the National Road Traffic Act lists that must be maintained in a specified manner in order to meet the minimum standards of roadworthiness:
- The engine and VIN numbers must match those on the registration document and there must be no sign of tampering
- There must be no damage or rust present on the body or chassis. Doors must be easy to open and firmly attached at the hinges
- The speedometer, odometer, seatbelts, lights and indicators must be in working order
- The windscreen must be free of damage, windows designed to do so must open and close and windscreen wipers must work
- Wheels and tyres must be the correct size and tyres should have a tread depth of at least 1.6 mm
- Brakes and shock absorbers should be in good working condition, with no leaks from the hydraulic system
- Wheels should be properly aligned and the steering system fully operational
- The engine compartment, including wiring, must show no signs of damage or leaks
- The battery must be properly secured, and the transmission in good working order
- There must be no excessive smoke or noise from the exhaust
You should also know that if the condition of your vehicle was material to the loss, the insurer can repudiate your claim for damage or loss, as well as the claim of any third party. For example, if you have an accident and injure a pedestrian because your brakes fail, and your brakes fail because they are worn, damage to your car, and the pedestrian’s claim may be rejected.
5. Driving recklessly or under the influence
If you drive under the influence of alcohol you are breaking the law and your insurer can reject your claim. The same goes for driving recklessly which is when you don’t show any care for other road users. So, if you are WhatsApping and driving, you are driving recklessly. Speeding is another no-no. Keep to the speed limits.
And if you have an accident, no matter how small, don’t flee the scene. In the case of bumps and dents you can swap details with anyone else involved and report the accident to the police within 24 hours. If there are injuries, you need to be on the scene until the injured are treated or taken to hospital. Failure to do so could be grounds for rejection of the claim.
Related posts
6. No write-off cover
If you have comprehensive car insurance, you are covered for a write-off. If you have third-party cover only you are not covered for a write-off. Check your policy to see what you are covered for. Also find out if you are covered for the full amount you owe to a finance company such as bank on your vehicle. One of the most common complaints to the Ombud for Short-term Insurance is about claims paid that are less than the amount outstanding on a vehicle finance agreement, which can leave you seriously out of pocket.
7. No tracking and security device
If your insurance policy requires you to have an alarm, immobiliser and tracking device, and you don’t, your insurer can reject a claim for damage or theft. You are also responsible for keeping your vehicle generally secure including locking doors and keeping the keys in a safe place.
8. Vehicle inspection not carried out
Most insurers insist that your vehicle is inspected when you take out a policy. This is to check for any pre-existing damage. If this inspection is not done, you are in breach of contract and your claim will be rejected.
9. Vehicle used for business
Most vehicles are insured for private use, which includes using it to get to and from work on a daily basis as well as for social purposes. It excludes any meetings you need to drive to or clients you visit. So, if you have an accident while driving to a client meeting, and your vehicle is insured for private use only, your insurer can reject your claim. If you insure your car for business use as well, you are covered for these trips.
10. Vehicle not parked securely at night
Insurers want to know where your vehicle is parked at night. If you state that your car is parked securely in a locked garage at night, but you regularly leave it outside, you will not be paid a claim if it is stolen or broken into.
Keep to your end of the deal
It’s an unfortunate reality that vehicle insurers deny claims. You need to educate yourself on the terms and conditions of your insurance policy and make sure you comply with them. Ask your insurer or financial adviser if you are unsure of anything in your policy.
Follow these tips to reduce the chances of your claim being rejected.
Read the fine print: Know and understand the terms and conditions of your policy including items such as the excess, exclusions and whether other drivers are covered.
Be honest and upfront: Don’t withhold any information from your insurer. Be honest about previous accidents, who will be driving the car and if the car will be used for business purposes.
Keep your vehicle well maintained: Keep up to date with services and maintenance and have a record of these to show your insurer.
Drive responsibly: Any reckless behaviour that leads to an accident could see your claim being rejected so obey the law and the rules of the road.
Stick to your promises: If you stated, for example, that the vehicle is kept in a locked garage at night, don’t park it outside.
Where to get help
If you believe your claim has been unfairly assessed or rejected, you can lodge a complaint with the Ombudsman for Short-term Insurance. Visit www.osti.co.za for additional information.
Sources: Ombudsman for Short-term Insurance, Gumtree, Fin24, AASA
Original article published on: April 26, 2017
Updated on: January 30, 2020
Updated on: April 13, 2021