What is not covered by your Car insurance policy?
Car insurance is the most sought after product by the insurance companies due to the high ticket premium associated with the sale. Many insurance companies do not explain to the customer the exclusions under the car insurance policy. Each car insurance companies have almost the same exclusions as prescribed by the IRDA and any other extra exclusion set by the insurance company will be specified in the insurance policy.
Agents or the executives of the insurance companies are not interested to explain the Exclusions thinking that it may hamper the sale process. It is very important from the point of customer to understand what is not covered under your car insurance policy and follow the things to prevent any claims from getting rejected. Here are the common exclusions that are not covered under the Car insurance:
Loss due to Wear & Tear:
Wear & Tear is the damage that occurs naturally as a result of usage of the car. This wear and tear is inevitable and occurs due to the aging of the car. The wear and tear in a car cannot be covered under the insurance as only the accidental damages are covered under an insurance policy. This also includes the normal wear and tear of the tyres in a car due to the usage over a period of time.0.12
For instance, if a car is driven for a period of time and due to which the Tyres and Tubes of the car are worn out. In this scenario the customer cannot claim for the worn out tyres as the loss or damage to the tyres is due to wear and tear. Had the loss been due to an accident then the insurance policy would have covered the claim amount.
Loss or damage to the car due to wear and tear is not covered under your car insurance policy.
Claims not considered if policy is lapsed:
Car Insurance is an agreement between the customer and the insurance company in which the insurance company agrees to provide compensation to the insured customer in case of loss or damage to the car or a third party due to an insured peril in return for payment of a specified premium. The agreement is valid for a period of 1 year or 3 years and any loss or damage within this period is compensated by the insurance company. The first party car insurance price is different for different car insurance companies and varies from company to company.
If the loss or damage occurs after the expiry of the policy period, insurance company is not liable to settle the loss or damage incurred by the customer. The major general exclusion in the car insurance is the claim is not settled if the loss or damage occurs after the expiry of the policy period. Hence, it is of utmost importance for the customer to have the insurance coverage at every period of time to get the claims settled.
Loss or damage to the car due to expired Car insurance policy is not covered under your car insurance policy.
Alcohol or drugs:
Any damage or loss to the car caused due to an accident when the insured driver/owner of the car is under the influence of alcohol, drugs or any other intoxicating substance is not covered under the car insurance policy. Drunken drive is the major cause of accidents in our country and no insurance claim is payable in case the driver/owner is found to be under the influence of intoxicating substances.
Two types of claims; own damage and Third party claims are not payable if the insured is found to be under the influence of alcohol and drugs. Third party claims involve the loss of life of third parties and is viewed as serious offence by the honourable court. Hence, it is advisable for the customers to refrain themselves from drunk & drive as these claims are excluded under the Car insurance policy.
Intentional injury or damage:
Insurance covers the loss or damage to the property due to an accident or unintentional event. If the insured person has intentionally caused damage to a person or property, then the claim is not covered by any insurance company. Similarly, the car insurance doesn’t cover the loss or damage to the car caused intentionally.
There might be instances where the insured customer’s car has been performing poorly and he wants to get rid of the car, he may deliberately damage the car and approach the insurance company for claim. These kind of claims are not settled by the insurance company if it is proven that the customer deliberately caused damage to his car.
Loss or damage to the car intentionally or deliberately is not covered under your car insurance policy.
War & Nuclear:
Any damage to the car due to war, terror attacks, invasion, foreign enemy action, civil war, mutiny, rebellion, hostilities, radiation or nuclear material/weapons are not covered under a standard motor policy. Any loss or damage caused to the car due to a war or fire as a result of nuclear attack is not covered under the car insurance policy.
There is a big difference between the War and the Riots; A Riot is always a violent public disorder specifically a disturbance created by three or more people acting together with a common intent while the War is a state of armed conflict between two countries or different groups within a country. Any damage to your car due to riots is covered under the car insurance policy, but the damages to the car due to War are not covered under the car insurance policy
Any kind of collision damage to the car or third party damage caused due to organized racing is not covered under the car insurance policy. All the private cars registered in the country are to be used for pleasure purpose only and those registered as Commercial are to be used for Commercial purpose.
Using a private car for organized racing is considered a crime in our country as they may lead to accidents endangering the lives of ordinary citizens travelling on the roads. We might see many people involving in car race competitions with their private cars and meeting with accidents which are not payable under the car insurance policy.
Any loss or damage to the car as a result of violation of car manufacturer’s guidelines for use of the car is not settled under the car insurance policy. The loss or damage to the car which is covered under the Manufacturer’s warranty is also not settled under the car insurance policy as it forms a part of the exclusions mentioned under the car insurance policy.
Consequential loss or damage of the car is not covered under the car insurance policy. The damages caused to the car due to the consequence of a certain action of the third party or the policyholder whether intentional or by accident and not the direct outcome of an insured peril is not covered in the car insurance policy.
For instance; if the customer found out that he oil is leaking from the engine of the car and still decides to drive the vehicle and causes the engine to undergo irrevocable damage, then this situation is considered as a consequential loss and is not settled under the car insurance policy.
The car insurance policy would not cover any contractual liability that the policyholder may have towards the insured asset; in this case his/her car. Contractual liability refers to the liability of the insured due to an accident on account of him/her entering into a contract.
For example, if a customer has pledged his car to someone against a loan for a certain period of time and the car is damaged while being driven by that party to whom the car has been pledged, then any loss or damage to the car are not covered under the car insurance policy.
Outside geographical area:
Any law made in the country is only valid in that particular geographical area and the incidents happened outside the geographical area are dealt as per the laws prevailing in that particular area. The Motor insurance act is applicable only within the Indian geographical area and any other accidents or loss or damage to the car outside the geographical area is not covered under the car insurance policy.
The extension for driving the vehicle outside the geographical area and the insurance coverage in this scenario can be covered by paying extra premium. The geographical cover can be extended to our neighbouring countries such as Bhutan, Nepal, Bangladesh, Pakistan, Maldives and Sri Lanka. The claims would be settled as per the local laws prevailing in these countries at the time of accident.
Valid Driver’s Licence:
Indian Motor Vehicles Act mandates to have a valid driving licence at the time of driving the car and can attract fines up to Rs.10, 000/- with or without imprisonment. Any person above the age of 18 years in our country can apply for a driving licence and get it from the local RTO office after passing the driving test.
Any loss or damage to the car or third party is checked for a valid driving licence. If it is found that the person driving the vehicle is not having a valid driving licence, then the claim may be rejected by the insurance company. Driving of cars by Minors without a valid licence is a crime in our country and is a punishable offence.
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