Majority of the insurance holders accept the insurance policies without reading the “Terms and Conditions”. The legal terminology, the long and lengthy paragraphs of terms in the policy makes it a tedious task to go through in detail and it ends up in signing the documents. This is the most common thing that happens with customers. It is important to note that different insurance policies provide different coverages. The policyholders should know what is covered and what is not covered in their car insurance policy. Under all the car insurance policies there are certain factors that the insurance company does not provide the coverage and these are given below.
- Driving with an invalid license
- Driving under the influence of intoxicants
- Automobile overload driving
- Misinformation
- Unethical use of the vehicle
- Registering claims after 3 years
- Intensional Damages
1. Driving with an Invalid License
Driving a vehicle with an expired driver’s license is illegal. If you get into an accident, your insurance company can deny coverage if you have an expired license.
2. Driving under the influence of intoxicants
Insurance companies do not entertain insurance claims if the owner or the driver of vehicles drives under the influence of the intoxicants. These include consumption of alcoholic beverages, drugs, or any other intoxicants which do not support the driving conditions. It is unethical to make any insurance claims under these conditions. It is also a punishable offense and the legal action will be taken on the driver or the owner of the vehicle. Insurance claims will be rejected by the insurance companies under these circumstances.
3. Automobile overload driving
If the car is overloaded beyond the full capacity and any mishappening occurs during the drive. The insurance companies do not pay for the claims. The damages caused because of the overload or driving beyond the permissible limits or driving with the excess number of passengers or carrying any goods or any other activity resulting in unauthorized usage of the vehicle are permissible to be claimed. The damages which are caused under these circumstances are not entertained by the insurance companies.
4. Misinformation
Providing any incorrect information with the intension to get benefit from the insurance is an unethical and fraud activity. The motive of the policyholder may be to get financial benefits from the insurance company. During the coverage period if the policyholder commits any act by giving misinformation directly or with the help of the third party such claims once detected by the insurance company will not be covered. In fact, legal action may also be taken by the insurance company on the policyholder. Making a false claim which did not occur and getting insurance policy benefit is a fraud.
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5. Unethical use of Vehicle
The insured vehicle should be used for the purpose it was supposed to be used. If the vehicle is used for purposes other than what is given in insurance policy the insurance company shall deny the claims. Use your car only for the purpose that it should be used and follow the terms and conditions of the insurance policy. A Violation of the law will imply a crime and federal penal code may apply.
6. Registering claims after 3 years
If any mishappening occurs to your vehicle and you did not make an insurance claim because of your work schedule until three years and you registered your insurance claims after three years then motor insurance companies do not provide claim reimbursements. Insurance claims should be registered within three years of the accident. The best practice is to register a claim as soon as possible once the accident takes place.
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7. Intensional Damages
Any intentional damages to the car which are made by the insurance policyholder or the third party just to get insurance benefits are also not covered by the insurance companies. Insurance companies do a thorough analysis before and only then proceed with providing insurance benefits.
Conclusion
It is the obligation of the policyholder to make sure that the vehicle is well protected. Regular servicing of your vehicle, driving safely on the roads and other precautionary measures can ensure safety for you and everyone else on the road. The policyholder should read the terms and conditions of the car insurance policy. Consider the premium when you are taking the insurance policy. Understand what is covered and what is not under your insurance policy so that you will not be surprised when you make your claims.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
