When you buy a car insurance policy, which is mandatory by the way, you believe that you are covered against all odds. Since you have paid a hefty premium you get the notion that your insurance policy would cover you for all the possible contingencies which might strike. Right?
Wrong!
You should read the fine print of your car insurance policy. While it is true that your car insurance policy provides a comprehensive cover, there are some specific instances which are not covered. Surprised? Don’t be. There are limitations on your insurance coverage which are called exclusions and you should pay attention to them to prevent future surprises. To make your work easier, here are 7 common exclusions which you would find in all car insurance policies –
#1 Driving under the influence of alcohol and/or drugs
How many times have you been warned not to drink and drive? Even if you escape the notice of the police, you cannot escape the rejection of your claim in case of any consequential accidents. Accidents faced when driving under the influence of alcohol and/or drugs are excluded from coverage. Since you are committing a legal offence, don’t expect your insurance policy to pay for your crimes.
#2 Driving without a valid driving license
A driving license is mandatory to drive a vehicle, right? Though all of you know the rule, it is ignored by many. The consequence – if you face any accident and claim for it, you would be denied coverage. The insurance company first checks the driving license when a claim is made. If you are unable to produce a valid driving license bid goodbye to claim settlement.
#3 Accidents outside the geographical boundaries of India
Your car insurance policy, however comprehensive it might be, covers you only on Indian roads. If you are driving outside the Indian subcontinent and face an accident, any claims made would not be valid. You would have to foot the expenses yourself.
#4 Consequential losses
Though the damages suffered by your car are covered under a comprehensive car insurance policy, any consequential losses are excluded. Consequential losses are losses which result from your actions or the actions of any third party. They are not due to any natural or man-made disasters which are covered in the policy. For instance, if your car gets stuck in a water-logged area and you try to crank it up to start, you might cause a hydrostatic loss to the engine. This loss damages your engine which needs to be repaired or replaced. Since the loss was not due to flooding but due to your action to start the car, it is called consequential loss and excluded from coverage.
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#5 Normal wear and tear and depreciation
The normal wear and tear of your car and its parts are expected losses which accrue due to usage. These losses are not covered by your policy. That is why, when you make a claim, the insurer deducts the relevant depreciation from the repair costs and then pays the remainder.
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#6 Violation of guidelines as to the usage of the vehicle
The car manufacturer lays down guidelines for the usage of the car. If you do not follow these guidelines and as a result of which you suffer damages you would not get the settlement of your claim.
#7 Claim on a lapsed policy
A car insurance policy is a one-year contract which needs annual renewals. If you do not renew the policy within the due date, the policy lapses. When the policy lapses your coverage ceases. Any claim which is made subsequent to such a lapse is, obviously, not honoured.
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So, these are the most common exclusions which you can find in a car insurance policy. Beware of this list and keep them in mind so that when your insurer rejects your claim on any of these grounds you wouldn’t be shocked or cry foul.
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