by Ricky Publico, on category "Car Insurance"
June 19, 2019
Now that you have a car insurance, you’re guaranteed financial protection from any car-related damages you might incur on the road. However, a car insurance doesn’t give you the license to act recklessly out there. You can’t just apply for a claim after a car accident and expect to receive money in an instant. Your insurance provider will investigate your accident thoroughly before deciding to cover the expenses or not. And if you got your car insurance claim denied, don’t freak out just yet. There’s probably a good reason why it was denied in the first place.
This goes without saying, but your claim will obviously get denied if you still have unpaid premiums. This is why insurance providers recommend paying your car insurance in full. You’d think you’re saving money by choosing a 90-day or monthly payment plan, but that’s not the case. Accidents tend to happen sporadically. They are so random that they can happen during the first few days of your payment plan. If that happens, you’ll end up paying for the repairs yourself, together with the remaining balance of your car insurance.
Another obvious reason for a denied insurance claim is your negligence. We’ve established earlier how insurance providers investigate your claim before covering the expenses. So if your insurance provider found that you’re responsible for the accident, expect them to reject your insurance claim. If they found out that there was an instance where you could have avoided the accident, the insurance provider may also get your car insurance claim denied. After all, your policy should only protect you from accidents and damages beyond your control.
This one’s pretty straightforward: you didn’t have coverage to your specific damage so you got your car insurance claim denied. Let’s say someone stole your laptop from your car. You tried to apply for a claim, but your insurance provider reminded you that you removed your Personal Effects coverage to get a cheaper policy. Just because you got a cheaper insurance doesn’t always mean you got the best coverage in the market. Forgoing essential add-ons and tweaking your policy to get a cheaper one will cost you more in the long run.
To prevent car owners from filing claims for petty damages and fender benders, insurance providers added the deductible as a countermeasure. The deductible is the amount you have to shoulder before you make a claim. It is usually computed as 0.5% of your vehicle’s fair market value (FMV) minimum of PHP 2,000, but it’s better to check with your provider for the exact amount. So if your vehicle’s FMV is PHP 800,000, your deductible is PHP 4,000. Your provider will deny your claim if you’re applying for less than that.
Aside from deductibles, insurance providers also have a countermeasure called authorized repair limit. Authorized repair limit is an amount which the policyholder is allowed to spend on repairs without requiring the insurance company’s consent. It is usually computed as deductible plus towing, but better to check with your provider. So if you have a deductible of PHP 3,000 and PHP 500 for the towing, your authorized repair limit is PHP 3,500. If you spent more than PHP 3,500 on repairs, don’t bother filing a claim because it will be denied.
Unlawful activities will obviously get you in trouble, not only with your insurance provider, but with the police as well. Once your insurance provider found out you did something stupid and illegal like beating the red light or overspeeding, expect to get your comprehensive claim denied. Driving without a license or with an expired one will also do the trick. Or better yet, driving under the influence of alcohol will get your claim denied plus a rough night in jail.
Some car owners can get tricky sometimes. Once their vehicle gets a fender bender, they’ll file an insurance claim to repair the car parts not involved in the accident repaired as well. You shouldn’t do this for obvious reasons. When your insurance provider finds out you broke your headlights or your windshield before the accident, they will reject your claim easily. Unless the accident totally wrecked your car beyond recognition, you should just shoulder small repairs to avoid piling up your small claims, increasing your premium in the process.
Reading through the fine print and reviewing the clauses of your policy can be dreadful. But whether you like it or not, you need to familiarize yourself with your policy so you can avoid violating it. For example, if you are the insured and authorized driver but your significant other was the one driving the car when the accident happened, your claim will be rejected because it violated the policy. Accepting compensation from the person at fault can also get your claim thrown out. Why will your insurance provider cover your expenses when you already received money from the accident?
Getting your car insurance claim denied sucks, but it’s not the end of it. If you have enough evidence to dispute the rejection, you can escalate your claim to the Insurance Commission. They are the ones in charge of overseeing insurance companies in the Philippines. Drop them an email at email@example.com or call them at (632) 523-84-61 to 70 local 127/103 and they will assist you with your claim dispute.