As a renter, you may think that if you purchase rental car insurance your claim will be automatically accepted in the event of an accident or other issue. Unfortunately, this isn't always the case, and it's important to understand why your rental car insurance claim can be denied. In this article, we'll explore some of the most common reasons why your rental car insurance claim can be rejected and what you can do to reduce the chances of it happening.
Top reasons for denied claims
Having rental car insurance is an important step to ensure your financial security while traveling. But you can’t stop at getting insured. Before your insurance claim can be paid or reimbursed, it goes through claims adjusters who will investigate and then approve it. You have to be aware that your insurance claim can be denied due to a variety of reasons, and reduce the risk of this happening.
Below are some of the top reasons that insurers may use to justify the denial of a claim or to pay less than the amount that you initially believe you’d be paid:
Reason 1: Lack of Coverage
One major reason an insurance claim may be denied is due to a lack of coverage. This can be due to numerous factors:
The damage isn't covered by your insurance coverage policy
There are various types of rental car insurance coverage, so it’s important to understand what kind you have. For instance, you might inadvertently think that you’re already covered when in fact you actually have another type of insurance (and it’s not damage cover!). To avoid the risk of claim denial, make sure you learn the different kinds of rental car insurance and what they do cover so you can get the coverage that you need well in advance.
Your personal auto insurance doesn't cover rentals
Having reliable auto insurance is an important part of ensuring your safety and protecting you from financial loss. However, not all personal auto insurance policies include damage to a rental car. It's essential to understand the limits of your own insurance coverage so that you can make wise decisions if you choose to rent a vehicle in the future.
If you want financial protection while driving a rental, make sure to look into supplemental coverage plans available through rental companies and third-party providers when reserving the vehicle. With this foresight, you'll have peace of mind knowing that your rental experience is protected.
Your claim is greater than your coverage limits
Policy limits dictate the opportunities for recovering against your losses. As policy limits represent the maximum amount that can be paid out by the insurer. If your claim exceeds policy limits, you will obtain only a fraction of the requested amount. It is critical to understand policies and policy limits in order to determine what damages are likely recoverable after filing a claim.
Filing a claim on an insurance policy can be immensely stressful, especially when your claim exceeds the policy limits. To avoid this happening, you should do your due diligence and learn what your policy limits are are make sure to get only rental cars that are within these limits. At Bonzah, for instance, our rental car damage insurance covers up to $35,000. You can certainly get a rental car that costs beyond this, but bear in mind that you’ll end up paying for any excess over this amount.
Reason 2: Inaccurate or Missing Information
The second reason why an insurance claim can be denied is inaccurate information. People often don’t realize how important it is to provide accurate and complete details when filing an insurance claim, as each case must be evaluated in detail for approval.
It’s essential that claimants provide all the information requested, including any relevant documents and photographs of damages sustained. Without this evidence, insurers may deny the claim due to a lack of evidence or incorrect dates and other details on forms. In addition, if there are discrepancies between what was reported by the claimant and what was found during an investigation of the scene, then it will likely result in further delays or even denial of the claim.
Reason 3: Unauthorized Driver
Another reason why an insurance company will deny a claim is due to an unauthorized driver. This means that the person driving was not listed on the policy as someone who is covered by it. So if they cause damage or injury while driving your vehicle, there will not be any coverage available from your insurer. This can leave you responsible for any costs associated with the incident which can be very costly and put a strain on your finances.
Unauthorized drivers are a common reason for an insurance claim to be denied, so it’s important to make sure that you don’t inadvertently let anyone who isn’t listed on the rental agreement drive your rental car. Otherwise, you’re taking a big risk when something unexpected happens that severely damages your rented vehicle.
Reason 4: Mechanical Breakdown
In some cases, an insurance claim can be denied due to a mechanical breakdown. Mechanical breakdowns occur when something within the vehicle fails due to normal wear and tear. This could include brakes failing and tires needing replacement because of excessive use or age.
When this occurs, an insurance company may deny a claim if it is determined that there was no sudden accident or external force causing damage to the vehicle. Claims for repairs resulting from mechanical breakdowns are typically not covered by standard policies as these incidents are viewed as preventable with proper maintenance and care of a vehicle over time.
Reason 5: Accident Damage Exclusions
Once you purchase rental car damage insurance, you’re automatically covered for accidents. However, you should know that there are instances which could invalidate your claim, and these are usually enumerated in your policy. Among the common policy exclusions are:
- A) A contract violation by the renter, or any other driver, authorized or unauthorized.
- B) Failure to follow the appropriate claims reporting procedures.
- C) Participation in motor sport or motor racing competition and/or practice.
- H) Driving under the influence of alcohol or drugs, whether prescribed or not.
- I) While committing any unlawful acts.
- J) Using a rental vehicle For-Hire.
The best way to avoid having your insurance claim denied is to make sure that you don’t do any of the exclusions and to always drive responsibly. Also, make sure to read up on the policy inclusions and exclusions from your rental car insurance provider so you know exactly which actions on your part could cause you to lose coverage.
Reason 6: Pre-Existing Damage
Rental car insurance can be an invaluable asset when accidents occur, but sometimes pre-existing damage to the vehicle can leave you with a denied claim. Insurance companies will not cover any damages that were present before the policyholder took possession of the vehicle, as this was not their responsibility or fault.
To protect yourself, you have to thoroughly check your rented vehicle for issues when you pick it up from the rental company. This would not only help you avoid a claim denial in case something happens, it would save you a lot of money since many rental car agencies will charge customers for any existing damages they notice when you return the vehicle. providing them with documentation of these charges in case an issue arises later on.
Understand Your Policy to Avoid a Denied Claim
It is important to be aware of your limits and coverage when it comes to any kind of insurance. Remember that some kinds of damage may not be covered by your policy, such as those resulting from normal wear and tear, and accidental damage arising from behaviors deemed as irresponsible by the insurer.