NEW DELHI: A communication between a general insurance company and the nominee of a person who had bought a policy from the former has become viral on social media. The letter communicates the reason for rejection of accidental death claim. In the letter, the insurer has expressed its regret for declining the claim as the insured was riding a 346 CC bike and as per policy terms, the claim is not payable for any bodily injury sustained for riding a bike over 150 CC.
The claim rejection letter, more so the reason cited for it, could have come as a shock for the grief-stricken family which has lost one of its members to an unfortunate accident. The family might now have to go knocking at the Insurance Ombudsman or consumer court to battle it out with the insurer, if they have the patience and resources to do so.
Jitendra Solanki, a Delhi-based SEBI-registered investment advisor, says he is not sure if this is a standard clause (rejection based on engine capacity of the bike), but this shows how minutely one needs to read the policy documents.
To ensure such a fate does not befall on you or your family members, it would be wise to be more vigilant while buying an insurance policy—life or non-life. Insurance companies have many ‘exclusions’ and ‘exceptions’ or situations under which insurers are not liable to pay claims. Often, these exclusions are not well highlighted by insurance companies as much as they highlight the benefits of the plans. But knowing these exclusions or fine prints may save your family from many hassles in the future.
Here are some little-known reasons for which your non-life insurance policy claims might get rejected:
Motor Insurance
Home Insurance
Health Insurance
So, in the future if you want to avoid any hassles while getting insurance claim settled, make sure you look beyond the benefits of an insurance policy highlighted by the insurer and read the fine prints.
Look beyond what's highlighted
Almost 15% of motor and health insurance claims get rejected on an average by insurance companies
Do not get carried away by the big claims of insurers, and do read the fine prints and list of exclusions
Maintain all the relevant documents and proof of damages or medical conditions handy in order not to get your claims rejected
Be honest with your disclosures while buying an insurance policy, hiding facts may prove to be a big hurdle at the time of claim settlement
In case of private insurers, claim rejections in case of motor and health insurance is close to 25%