If water has entered the car, insurers tend to reject the claim as they feel that the policyholder should have been more cautious and the situation could have been avoided. This is known as consequential damage. Consequential damage occurs when the policyholder uses the car despite clear red flags. Driving along a flooded road when there is another option, knowing that it can lead to engine failure is one instance. Insurance companies show zero tolerance to claims of this nature.
There are also other reasons why claims can be denied.
Personal car for commercial use
If you have bought a personal car insurance, but the accident has occurred when you were using your car for commercial purposes (like hiring it out as a cab or use for official trip), then your claim will be rejected without a second thought.
Driving under the influence of alcohol or drugs is a crime. And insurance companies will only be happy to toss your claim into the reject bin if this allegation is proved.
However, natural deterioration due to regular use of a car is unavoidable and hence you cannot be indemnified against this. This wear and tear consists of weakening of engine, scuffing of brakes, suspension, peeling of paint or slight abrasion of the interiors, as well as minor dents or nicks to the exterior while in use.
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