Car insurance is designed to protect you from unforeseen financial losses; however, not every incident should be claimed. A common belief among car owners is that “since I pay insurance, I should just claim for everything.” Unfortunately, this is a mistaken way of thinking.
Claiming the wrong things may raise your car insurance rates, affect your No Claim Discount (NCD), or possibly result in a claim denial.
This guide covers the most typical situations in which you should not submit a car insurance claim, why you should avoid them, and how to manage minor incidents wisely.
- Regular Maintenance
Car insurance does not cover routine maintenance such as tire replacement, engine oil changes, or replacing old brake pads. Maintenance and normal wear & tear are considered routine responsibilities of every car owner and must be paid for out of pocket. Trying to claim them will most likely result in rejection.
- Incidents During Commercial Use
Most personal car insurance policies do not cover you if your car is involved in an accident or is stolen while you are driving it for business. This might include driving Grab Car, as they are currently classified as Public Service Vehicles and are subject to commercial regulation.
If you are using your car for business purposes, then you will need to purchase a commercial insurance policy. Commercial car insurance is typically more expensive than personal car insurance because it covers higher-risk activities.
- Damage caused while doing something illegal
Car insurance policies do not cover the damages suffered in an accident while you’re doing something illegal. For example, driving your car in an unroadworthy condition, driving under the influence of alcohol or drugs, speeding or reckless driving, driving with an invalid driver’s license, or illegally leaving the scene of an accident.
- Modifications
Car insurance does not cover modifications made to your vehicle, such as the installation of a new sound system or adding a spoiler.
Therefore, you will bear the costs of these modifications in the event of an accident resulting in damage.
- False Information
Avoid providing false information. Insurance fraud, including overstating damage or claiming injuries that didn’t occur, can lead to denied claims and even criminal charges. Be honest with your insurance company to stay protected.
- Natural Disasters
Natural disasters could occur at any time, but the damage might not be covered by your insurance. Most standard car insurance policies do not cover things like floods, landslides, and other natural disasters. Before filing a claim, please ensure you are familiar with the details of your coverage.
Final Thoughts
Car insurance is useful in accidents, but make sure you understand what you can and cannot claim. Don’t be the person who tries to claim routine maintenance, wear and tear, or questionable modifications, and definitely don’t drink and drive, speed, or lie on your claim.
If you’re unsure about what your insurance policy covers, reach out to your insurer for assistance. It’s super important to always drive safely. Remember to avoid drinking and driving, follow traffic laws, maintain your car regularly, and stay cautious on the road. These habits will save you a lot in the long run.