Operating a business with commercial vehicles involves risk. You can be in an accident, breakdown, or otherwise incur damage to a vehicle. That is why it is important to have commercial vehicle insurance, as it can shield your business from costly repair bills and the financial chaos that can accompany sudden repairs.
However, the problem is that many business owners experience claims being rejected when they need help the most. In almost every case, claims are denied because of a simple oversight or missed detail that could have easily been avoided. So, why are claims denied in the first place? In this piece, we will identify common reasons for denied insurance claims.
Many commercial vehicle insurance claims are denied for simple, avoidable reasons. By knowing them, drivers can make an informed decision. Here are some major reasons behind the insurance claims getting denied:
When purchasing a commercial vehicle insurance policy, many claims are denied due to incorrect or incomplete information. Even small mistakes can result in the denial of your claim. Mistakes can occur with vehicle registration, driver info, or vehicle usage. Insurance companies check every fact when you raise a claim, and if there is any mistake, they can make your policy invalid for that claim.
A claim will never be accepted if an accident or damage occurs when your insurance policy is inactive. This happens when you do not renew it on time or stop making premium payments. Also, any claim raised for that period when the policy was inactive will be invalid. The responsibility is on you, as the policyholder, to ensure expiry dates are tracked.
Commercial vehicle insurance only provides coverage for the uses stated in the policy. Any unauthorised and or illegal work will be deemed a denial of claim. Examples of non-insured usage are when a loaded goods vehicle is used to transport people on personal trips, for racing, or to transport something illegal.
The insurance claim will be rejected if the individual has no driving license during the accident. Claims will be denied when a driver's license is expired, suspended, or inappropriate for driving the vehicle. Driving a commercial vehicle without a valid license gives the insurance companies the full right to refuse the claim.
Insurers prefer an immediate report after an accident, likely within 24 to 48 hours. Failure to inform the insurer promptly can result in a rejected claim. Initiating a claim quickly allows the insurer to assess damages adequately. So, late notification will raise suspicions about your claim and could violate the terms of your policy.
If you alter the specification of the vehicle, like engine upgrades, CNG kit installation, or extra fittings, you must inform your motor insurer. Changing the specification of the commercial vehicle increases the risk factor significantly. Insurers deny claims if the condition of the vehicle is different from that presented in the policy documents.
All insurance policies feature specific coverage limits and exclusions. Most plans do not cover damage resulting from wear and tear or mechanical and electrical failure. If you raise a claim for wear and tear, that claim will not be paid. So, read your policy wording thoroughly to know what damages are covered.
If a driver has been found under the influence of alcohol, drugs, or any prohibited Class A, B, and C drugs during an accident, the insurance claim will be denied. Driving under the influence is against the law and falls far outside the scope of tolerable risk in insurance laws. No insurance company covers any loss caused by the acts of drunk or drugged driving.
Your claim can get rejected if you miss submitting any documents. This includes a claim form, a driving license, a policy copy, a vehicle RC, repair estimates, and sometimes an FIR. Adequate documentation is required because it enables the insurer to verify and simplify the claims process.
Every insurance policy has certain limitations, conditions, and permitted usage. If you break any of these restrictions, like overloading the vehicle, using it for prohibited activities, or driving in a restricted area, your claim could be denied. Insurance companies even inspect whether you followed the policy rules, including vehicle limits and other conditions.
Nobody enjoys the shock of a rejected insurance claim, especially when they could have realistically avoided it. It often comes down to little things that people have forgotten. Here is a brief list of things you can do to avoid commercial vehicle insurance claim rejection:
Ensure you provide correct and complete information when purchasing your policy.
Renew your policy before its expiration date, so it is actively in place.
Use your vehicle only for the claimed and permitted purposes.
Ensure the driver has a valid and valid commercial driving license.
Inform your insurance company about accidents or damage promptly.
Do not make claims for damages that are excluded from your policy.
Do not drive if you have been drinking alcohol or using drugs.
All needed claim-related documents are ready and up to date.
Comply with all the terms, conditions, and restrictions of use of your policy.
Managing your commercial vehicle insurance is not just about paying your premiums. It is about knowing how to protect your business when something unexpected happens. Therefore, focus on clear communication, timely paperwork, and conducting every step of a claim without missing any steps. If you make it a practice to review your policy occasionally, it will help you avoid surprises.