17 May Top 7 Reasons Car Insurance Claims Are Denied
Being involved in an accident or having your car stolen is an upsetting situation. Worse still is having your car insurance claim denied because of something you have or haven’t done. Read on to find out 7 reasons why car insurance claims are denied and how to avoid these situations.
1. Not covered for your claim
If your insurer has denied your car insurance claim, it may be because your insurance doesn’t cover what you’re claiming for. In New Zealand, there are three types of car insurance and each type varies in what it covers.
Third party car insurance covers your legal liability if you cause an accident while driving and damage someone else’s car or property, but it doesn’t cover any damage to your own car. Third party, fire and theft is similar to third party but also includes cover for your car in the event of loss or damage by fire or theft. Comprehensive car insurance means you’re fully protected, and any accidental damage to your own car and any others, as well as loss through fire or theft, is covered.
Before claiming, check that your insurance policy covers your claim. Or talk to an Insurance Adviser about the right type of car insurance cover for your situation, so that you’re not paying more than you need to or less than you should for your car insurance.
2. Vehicle not roadworthy
Driving a car that isn’t roadworthy or is unsafe to drive could mean your car insurance claim is denied in an accident. Worn tyres, damaged brakes, or a cracked windscreen are all reasons your car might not pass WOF and, as such, would not be roadworthy. To avoid having your car insurance claim denied because your car is not roadworthy, maintain your car through regular servicing and WOF, fit new tyres and have brakes replaced when needed.
3. Drugs or alcohol-impaired
Drink driving and drug driving are illegal in New Zealand and any claim resulting from an accident when under the influence will be denied. In most instances, if you are involved in an accident and police attend the scene, you will likely be breath-tested and the results will need to be reported to your insurer.
4. Personal vehicle for business use
If your car is insured for personal use only, and you use it for commercial purposes on a regular basis – doing deliveries or driving for Uber – there’s a good chance your claim will be denied if you are involved in an accident. Instead, be up front with your insurer and let them know if you are planning to use your car for business purposes so that you’re covered for both personal and business use.
5. Non-compliance of licence conditions
Driving without a driver’s licence or with an invalid licence is one of the most common reasons why car insurance claims are denied. No licence means no insurance cover so don’t let anyone without a licence drive your car. And those on a restricted licence must adhere to the conditions of this type of licence – no driving between 10pm and 5am, and no passengers (unless you have a supervisor with you).
6. Not taking enough care
Having car insurance cover doesn’t mean you can take chances when driving, and at all times, you must take reasonable care. Just like drink or drug driving is illegal, so too is not sticking to speed limits and disobeying road rules. Any claim for damage might be denied by the insurer if it’s determined that reckless driving was the cause of an accident.
7. Not telling the insurer something important
All information that is pertinent to your situation or the car being insured must be disclosed to the insurer – both initially when you apply for car insurance and at each renewal of the policy. That includes things like convictions, driving infringements, or vehicle modifications – anything that could have an impact on your claim.
Not disclosing important information that the insurer needs to know could result in your claim being denied. Ask questions, read policy documents, and make sure you understand the exclusions and limitations of your car insurance.
Get insurance help from Max Insurances
We know it can be hard finding the right car insurance cover, with so many options and insurers to choose from. That’s why the team at Max Insurances works closely with customers to understand their insurance needs and provide an insurance solution to fit. With access to a variety of insurance providers, we’re committed to helping our clients make informed choices about their car insurance. Get in touch if you’d like help finding the right car insurance NZ wide.Request a Call Get a Quote
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