Avoid Claim Denials: 10 Scenarios Your Insurance Won't Cover


June 12, 2024
Team Pineapple

Picture this: you faithfully pay your monthly car insurance premiums, expecting the ever-enticing cash-back bonuses. Isn’t that one of the reasons you signed up with your current insurer, after all? 

But now, they’re singing a different tune, and you want some answers.

Discover the top ten reasons insurers may reject claims, from negligence to drunk driving (reason number 3 is a doozy).

Knowledge is power, and by understanding these common pitfalls, you can proactively safeguard your coverage.

The TEN reasons your car insurance won’t cover you are:

  1. Neglecting Regular Vehicle Maintenance
  2. Unauthorised Vehicle Use
  3. Underestimated Mileage
  4. Failure to Report Modifications
  5. Inadequate Security Measures
  6. Driving Under the Influence (DUI)
  7. Delayed Reporting of Accidents
  8. Using Your Vehicle for Commercial Purposes
  9. Exclusion of Certain Perils
  10. Failure to Update Personal Information

Neglecting Regular Vehicle Maintenance

One of car ownership fundamentals, yet highly underrated, is vehicle maintenance, which can make or break your coverage. Your car’s condition can directly impact your insurance policy. Neglecting routine inspections and timely repairs can lead to your insurance denying claims at the most inopportune moments.

Consequences of Neglect

Minor issues turn into major problems when you ignore vehicle maintenance. For example, a small scratch could lead to corrosion, transforming your sleek ride into a rusty scrap machine. This damage can compromise your car's structural integrity. Moreover, skimping on maintenance can result in unexpected breakdowns, accidents, or even fires, leading to denied claims.  

If your car is deemed unroadworthy, your insurer will not pay. 

Getting your car serviced annually ensures your vehicle remains in good shape as far as having a decent tread on your tyres, keeping your brake pads intact, and guaranteeing your brake and hazard lights are up to scratch.

Keeping your car well-maintained also ensures you aren’t the one putting yourself or others in harm's way.

Insurance companies and providers expect one thing, and one thing only: responsible vehicle ownership. So, driving around in a ‘hot mess’ on wheels is a major turn-off (aka cause for concern). When it’s time to claim, insurers could argue that your actions contributed to the damage or loss, which falls outside the coverage's scope.

It’s also imperative to regularly take your car for servicing to ensure all the cogs and wheels are turning smoothly. The frequency with which you have to do this will depend on the guidelines in your owner’s manual, or service book, which will provide all the necessary details.

Ultimately, what will also influence how regularly your car goes into the shop is your usage. 

“How often do you drive?” 

“What fuel do you use?” 

“What condition is your vehicle in?”

These are just some of the questions that’ll inform your decision to service your car.

A trip to the service centre ensures your car’s performance, fuel efficiency, safety, and condition remains top-notch. Failing to maintain your car, unsurprisingly, has consequences.

We’re talking increasing the chances of your car getting into an accident because your brakes, tyres, engine, etc., have not been serviced. So, do right by your vehicle and keep your service book up to date. 

Remember to go to accredited service shops with proven service excellence and one that’ll be approved by your insurance provider. Unfortunately, this means your friend who “once took mechanical engineering as a subject in high school” won’t make the cut.

Pineapple's Advice

Avoiding this pitfall is relatively easy; simply prioritise routine maintenance. Regularly inspect your vehicle, address minor damages swiftly, and keep records of all maintenance and repairs. This proactive approach enhances your car's safety and strengthens your insurance coverage.

As mentioned, the frequency of your visits to the service shop will depend on your car’s service book and your driving habits. But, an annual visit is generally a good place to start.

Unauthorised Vehicle Use

A good insurer will alert you that your insurance policy has specific parameters by which you should abide, like who will be driving your vehicle and for what purposes. And even if they don’t, this information should be laid out on your policy documents, which we’re sure you’ve read and memorised (right?). So, your insurer may reject any claims from accidents or incidents during unauthorised use of the vehicle.

Consequences of Unauthorised Vehicle Use

It doesn’t matter if it was “just a quick trip to the shops,” by allowing unauthorised drivers to use your car without your insurer’s knowledge, you risk voiding your insurance coverage. This is only made worse if the individual in question does not have a valid driver’s licence. (Scandalous!) 

The same goes for operating the vehicle for purposes not covered by your policy.

Insurers need accurate information to provide adequate coverage. Not disclosing all regular drivers and usage patterns can and will result in claim denials. 

The key to avoiding such issues is total transparency. 

Pineapple's Advice

Nothing says “I trust you”, like lending someone your car—we respect that. We’re also not here to tell you how to use your car. However, here's a friendly word of advice: ensure that the person who drives your car is able to do so in a safe manner. They shouldn’t be tired, under the influence of substances, or medicated, for example. 

And to echo the above statement, communicate openly with your insurer who will drive the vehicle to prevent unnecessary claim denials. Inform them of everyone who regularly drives your car, even if it’s not every day. Remember to provide accurate details about its intended use; this guarantees your coverage will align with your needs.

And to end off, the onus is on you to make certain that anyone you’d like to include in the policy has a valid driver's licence. This is to avoid any disasters should there be an incident and the need to claim.

Underestimated Mileage

Understating your annual mileage can have unignorable consequences for your insurance coverage. 

What’s mileage? It refers to the distance that you’ve travelled, measured in kilometres. A car’s mileage is the number of kilometres it can travel using a litre of fuel.

Your mileage matters because it tells a story of how much time you spend on the road. 

The more time spent travelling, the higher the likelihood of danger, collision or other claim-related events. For example, the more you’re on the road, the greater the risk of having an accident or breaking down.

Secondly, if you work far away from your place of residence, your mileage will be high. The more mileage, the more time you spend on the road which means an increased risk for the insurer. Significantly underestimating your mileage and then filing a claim might lead to your insurer questioning the accuracy of your initial information. 

Consequences of Underestimated Mileage

If your insurer believes that your understated mileage contributed to the incident leading to a claim, they might deny it. So, if you claim for an accident and your mileage at this time is impossibly high compared to the mileage you told your insurer when you purchased the policy,  it may jeopardise your coverage. This can be especially true if you travel outside South Africa’s borders. Insurance protocol states that you must first notify the insurer of such trips. Then, they’ll provide you with a cross-border letter, which serves as proof of comprehensive insurance for the vehicle and is valid outside of Mzansi. 

Be careful to note whether your cover extends to your country of travel and what the restrictions are as far as the amount of time your car can be out of SA and still remain insured.

Pineapple's Advice

When it comes to insurance, honesty really is the best (and only) policy. Be honest and accurate when you provide your insurer with information about your annual mileage. If your driving habits change significantly during the policy period, inform your insurer promptly to ensure your coverage remains valid.

Pineapple does not offer a usage-based or pay-as-you-drive policy. Why would we when our fully comprehensive cover is already so affordable? So, this instance does not apply but we thought hey, the more you know. right?

Failure to Report Modifications

We don’t blame you for wanting a car that looks like it came straight out of an episode of that show about pimping rides, but your insurance might. Modify your vehicle to your heart’s content, but know that failing to report these modifications can lead to complications with your insurance provider.

Consequences of Failing to Report Modifications

Making enhancements to your vehicle, whether aesthetic, performance-related, or otherwise, can affect coverage. This is because the enhancement and who installed them could put you (and other drivers) in danger. Modifications can interfere with or disrupt the car’s system, the mechanisms might be incorrectly installed, or the mechanic might not be qualified to make these changes. This could all lead to compromising your car and your cover. Therefore, insurers must assess the risk accurately, and unreported modifications complicate this assessment.

Furthermore, if you're ever involved in an accident and your insurer discovers undisclosed modifications that they believe played a part in the incident or damages, they may reject your claim. 

Pineapple's Advice

Like the advice in number 3, honesty still remains the best policy. Speak to your insurer early on, even before making these modifications (assuming you haven’t yet). Some insurers will refuse coverage for a car with modifications upfront, and this is probably for the best. Doing so allows you to seek an insurer to accommodate your car’s needs. However, chances are if one insurance provider will not cover the enhancements, the likelihood of other insurers covering you is slim to none. 

Informing your insurance provider gives them a chance to accurately assess the risk, and to ensure all the costs associated with the modifications are covered, should you wish to include them in your policy. Notify your insurance provider of the change you want to make, the cost, and the supplier. Lastly, find out if, and how, these changes will affect your premiums and policy.

It is better to do this before doing anything, as chances are if one insurance provider will not cover the enhancements, the likelihood of other insurance providers coving you for the same thing is slim to none

A simple rule of thumb is to tell your insurer about anything that didn't come standard on the car, from wheels to sunroofs to new sound systems.

Inadequate Security Measures

It should come as no surprise that security measures majorly impact your monthly insurance premiums. Insurers encourage you to take steps to secure your vehicle as best as you can. Suppose your car is stolen or vandalised because your security measures were caught lacking. In that case, your insurer might question whether you took enough reasonable precautions to prevent such incidents.

Consequences of Inadequate Security Measures

When your insurer finds that inadequate security measures contributed to a theft or damage incident, they may deny your claim. A lack of safety features like a tracking device might make your vehicle an easy target for carjackers. So, do the right thing and equip your car with the appropriate security measures. You’ll be happy to know this will also lead to lower premium prices.

Pineapple's Advice

Stay out of your insurer’s bad books by investing in approved security measures and practising safe parking. You might find having to pay R10 to park in the mall annoying, but you know what’s worse? Having your vehicle stolen because you decided to skimp on parking fees. 

So, that tiger is a small price to pay, all things considered. 

Document your security efforts, including any anti-theft devices or systems, to provide evidence in case you need to file a claim.

Driving Under the Influence (DUI)

Under no circumstances is it ever okay to get behind the wheel when you’re intoxicated or under the influence of drugs. It is not only against the law, but doing so also endangers your life and other motorists and pedestrians. If you're involved in an accident while under the influence, you’ll have to face legal consequences and insurance complications.

Consequences of Driving Under the Influence

DUI is a serious offence; it can lead to legal penalties like fines, license suspension, or imprisonment. These legal consequences will impact your insurance coverage. Suppose insurers find that your impairment played a role in the accident. In that case, they may categorise it as negligence on your part. 

As a result, they’ll deny your claim or worse, blacklist you, effectively barring you from buying car insurance from certain providers. So, if that doesn’t emphasise the importance of responsible behaviour and adherence to traffic laws, we don’t know what will.

Pineapple's Advice

The best way to avoid this situation is never to drink and drive. And with services like Uber and Bolt, who needs to, right? Not only does it protect your insurance coverage, but more importantly, the safety of yourself and others on the road. If you did not plan on drinking when you get to the venue and you drove, but ended up drinking anyway, leave your car parked wherever you are and catch a ride from one of the many e-hailing services available. 

And for those who can afford it, chauffeur services like Good Fellas are another option. Good Fellas “promotes responsible driving within South Africa by taking you safely, in your own vehicle, to your preferred destination”. 

Driving while under the influence is not tolerated by the law or your insurance, and rightfully so.

Delayed Reporting of Accidents

A delayed report can pose challenges during insurance investigations, leading to reduced or denied coverage if your insurer believes the delay hindered their assessment. So, when accidents occur, report them promptly to ensure evidence is preserved and witnesses' statements are accurate. 

Consequences of Delayed Reporting of Accidents

Most policies have a stipulated time frame within which you must report an accident, typically 24 to 48 hours after the fact. Delaying beyond this period could violate your policy terms, potentially leading to a denial of your claim.

Delaying a report can lead to complications, especially if the incident in question happened between 10 pm and 4 am, for example. This might raise suspicions that there may have been drinking and driving involved. 

Assumptions will be that the report was delayed due to the potential of being breathalysed or going for blood tests. 

Other complications can include a key witness who could’ve testified on your behalf, forgetting crucial information because of how much time has passed. This is grounds for your insurer denying your claim because the delay hindered their ability to accurately assess the claim. Naturally, you’d then have to make an out-of-pocket payment for any damages your car has suffered.

Pineapple's Advice

Don’t wait or even hesitate; file that report without delay! Start with notifying your insurer immediately after an accident, ensuring you follow their reporting guidelines. This will make for a smoother claims process and preserve your coverage.

Using Your Vehicle for Commercial Purposes

Your ride, your rules, right? Not if insurance has anything to say about that (joking, but not really). Using your car for commercial or business purposes while holding a personal car insurance policy can be problematic. Personal policies are specially designed for non-commercial use. So, using your car for business activities, like making deliveries or ridesharing, will result in cancelled coverage.

Consequences of Using Your Vehicle for Commercial Purposes

It’s simple: if you're ever involved in an accident while using your car for commercial purposes, your insurer will argue that the incident falls outside the scope of your policy. This will naturally lead to claim denials. The reason behind this is if you’re using your car for e-hailing or doing deliveries, you’ll be on the road more often. This increases the risk and likelihood of getting into an accident, especially during peak rush hour traffic or at riskier times (10 p.m. - 4 a.m.). 

The above information should be clearly stated in your policy. What’s also included is that using your car for business purposes is a serious breach of contract, so be sure to read your policy documents with care.

Pineapple's Advice

If you choose to engage in commercial activities using your car, it's crucial to discuss this with your insurer first. They’ll guide you on appropriate coverage options to ensure you're adequately protected and nothing slips through the cracks.

Exclusion of Certain Perils

Numerous insurance policies have exclusions for specific scenarios or perils. For instance, your policy may exclude coverage for natural disasters like floods. Exclusions can also encompass other natural disasters like earthquakes or events related to civil unrest or war. 

For instance, the South African Special Risks Insurance Association (SASRIA) offers short-term insurance for property damage within South Africa due to special risks such as civil commotion, public disorder, strikes, riots, and terrorism. This coverage is available to government departments, businesses, and individuals who pay SASRIA premiums with their insurance policies.

If your policy explicitly excludes coverage for these situations, claims arising from them may not be covered. Yup, it happens. 

Therefore, understanding your specific policy's exclusions can be a lifesaver car saver! The best way to stay clued up is by reading every email from your insurance provider, especially those regarding product upgrades and annual renewals. Doing so will avoid you getting left in the dark and out of the loop about what your car policy entails.

Consequences of Policy Exclusions

If your policy explicitly excludes coverage for the above situations, claims arising from them may not be covered. Repairing or replacing your car could result in a significant financial burden, and you may face substantial monetary losses. Exclusions are no joke; knowing you’re short of coverage can be stressful, leading to added stress and anxiety during times of crisis. 

Instead of relying on insurance for support and reassurance, you may find yourself facing uncertainty and financial strain.

Pineapple's Advice

To ensure you're adequately protected, carefully review your policy and understand its exclusions. For first-time car insurance buyers, or even those of us who aren’t the savviest when it comes to car insurance terms, sit down with someone or request a consultant from your insurance provider to go through the contract with you. The second option ensures that there are call recordings and data readily available as proof should something be sold to you that is being disputed at the claims stage. You’ll have the recordings on hand to dispute the claim. 

If you live in an area prone to specific perils or believe that certain exclusions may leave you vulnerable, consider additional coverage to fill these gaps. It might be a tedious task, but someone’s got to do it and that someone is you. Who else will love and cherish your car like you? No one. That’s why you have to familiarise yourself with your policy documents. 

Failure to Update Personal Information

It should go without saying that your insurance coverage relies heavily on the accuracy of your personal information. If your information changes, such as your address or contact details, and you fail to update it, it can lead to unnecessary difficulties.

Consequences of Failing to Update Personal Information

Insurers use the information you provide to assess your risk and calculate premiums. Please update any changes to avoid discrepancies affecting your claim. Moreover, if your insurer discovers that inaccurate information influenced your policy's terms or premiums and affected your claim, they’ll reject it entirely. 

Pineapple's Advice

To avoid this scenario, keep your insurer updated with any changes in your personal information. This includes changes in your living situation, contact details, or other relevant factors affecting your risk profile. Doing so ensures your coverage remains valid and accurate.

10 Bonus Scenarios Courtesy of Pineapple

  1. Non-Disclosure. Failing to disclose important information or providing false information during the application process can lead to claim rejection.

  1. Policy Exclusions. Every policy has exclusions. Claims that fall under these excluded circumstances are not covered.

  1. Lapsed Policy. If the policy has lapsed due to non-payment of premiums, any claims made during the lapse period will be rejected.

  1. Late Notification. Failing to notify the insurer within the stipulated time frame after the occurrence of an event can result in claim denial.

  1. Incomplete Documentation. Submitting incomplete documentation or failing to provide required evidence for the claim.

  1. Fraudulent Claims. Any claim found to be fraudulent or involving exaggerated damages can lead to rejection.

  1. Uninsured Perils. Claiming for damages or losses that are not covered under the policy’s scope of cover.

  1. Underinsurance. If the value of insured items is less than their actual value, claims may be reduced or rejected.

  1. Alcohol or Drug Influence. Claims involving accidents or incidents where the insured was under the influence of alcohol or drugs.

  1.  Non-compliance with Policy Terms. Violating specific terms and conditions of the policy, such as using the insured vehicle for unauthorised purposes.

When submitting claims, it's crucial to be thorough, honest, and timely to avoid these common pitfalls.

A Final Word

And there you have it, ten of the best. 

Now you know that by staying informed and being responsible, you can ensure that your coverage remains tailored to your unique needs. 

Speaking of needs, why not choose Pineapple to attend to yours? With us, you're not just insured – you're empowered to secure your financial well-being, no matter what comes your way.

Get a quote!

Do you know of other things that can lead to a cancelled policy? Maybe you’ve even experienced this yourself.

Let us know on any of our social media accounts (X, YouTube, Facebook and TikTok)!

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.

Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.

Team Pineapple

Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.

Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.

*We say they’re the finest because we want them to keep writing for us!

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Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.

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