Car Insurance Claims, What the FAQ

PineChats

June 28, 2024
by
Team Pineapple

Perhaps the car dealership demanded that you have insurance, or you wanted to protect your possessions from unforeseen accidents.  

Whatever the reason, you’ve decided to get car insurance. 

However, you can’t help but feel discomfort when you think about insurance claims. Prior experience or maybe even someone else’s story has made you weary.

Maybe you have more questions than answers.

So, Pineapple will clear up any confusion by answering the nine (odd number, we know) frequently asked questions about the claims process. 

Our guide will help demystify the details of this particular aspect of car insurance. By the end, you’ll feel satisfied and even learn to appreciate the insurance industry entirely. 

FAQs on Car Insurance Claims:

  1. How many car insurance claims can you make in a year?
  2. How do car insurance claims impact your premium price?
  3. Do claims impact your excess?
  4. Can a car insurance company refuse a claim?
  5. Why are car insurance claims rejected?
  6. What is needed to claim from your car insurance policy?
  7. How long does it take for a claim to pay out?
  8. Can a car insurance company cancel my policy after a claim?
  9. Does claiming from car insurance impact my credit score?

How many car insurance claims can you make in a year?

While insurance providers typically don’t limit the number of claims you can register, too many can negatively affect your policy. Numerous claims in a short period raise alarms and can signify a high-risk individual. Even if each claim is low in value if you’re claiming car insurance often, this may affect your premiums. Excessive claims can even lead to your insurer cancelling your policy. So, to sum it up, you’re not restricted to a certain number of claims in a particular year. However, it’s best to avoid claiming over every small scratch and dent. Read why in the next section.

How do car insurance claims impact your premium price?

Car insurance claims can trigger a price hike for your premium. This is because an insurance provider may see you as a higher risk afterwards, especially if most of the incidents’ cause can be attributed to you.Your premium may increase if you’re found to be at fault for the accident or if you violate a traffic rule.Minor claims aren’t likely to raise insurers’ eyebrows or hike your premiums. However, particularly expensive claims are more likely to do just that.Insurance companies typically consider your insurance history from 3 to 5 years. The information collected from that time span, such as the number of claims, is then used to determine the price of your car insurance policy.If you’ve claimed within that period of time, it will be reflected in the amount you’ll pay for your monthly insurance premiums.

Do claims affect your excess?

Most insurance policies have a fixed excess that does not change, regardless of the number of claims made. However, some insurers may charge additional excesses over and above the standard excess.Excess is the amount you agree to pay towards a claim before your insurance company covers the rest of the damage-related costs.So yes, depending on the insurer, your claim can affect your excess.For instance, an insurer may ask you to pay an additional excess in the following cases:

  • Policy start date: You claim within 3 to 6 months of your policy’s inception date.

  • Licence Issue Date: The regular driver named in the policy has had their licence for less than two years.

  • Regular driver age: If the regular driver is under 25 years of age.

However, not all insurance companies will have this clause, and some policies may have a fixed excess that does not change regardless of the claim.

Can a car insurance company refuse a claim?

Yes, depending on the situation, an insurer can refuse or ‘reject’ a claim. A rejection means your claim won't be processed because you might have failed to honour your car insurance policy's contractual stipulations. Clients fail due to factors like incomplete or incorrect information, non-compliance, and suspected or proven fraudulent claims. Any of these can be grounds for a denied claim, and the insurance provider refusing to pay. You can find specifics surrounding your insurance policy limits by reading your policy documents or asking your insurer to send you the details.

Why are car insurance claims rejected?

Car insurance claims can be rejected or denied for various reasons. Below are a few examples of why your claim could be rejected:

  • Misrepresentation/Non-disclosure: If the policyholder is found to have provided false or misleading information at the time of taking out the policy.

  • Unpaid premiums: If the policyholder has failed to pay their premiums or the policy has lapsed.

  • Lack of effort: Failing to take reasonable steps to protect the car from damage or theft, e.g. parking out in the open, no tracking device installed, and vehicle inspection not done.

  • Improper use: Using the vehicle for business purposes (Uber, Bolt, or as a delivery vehicle) without informing the insurer.

  • Negligence: Driving under the influence of drugs or alcohol or driving recklessly (speeding, racing, etc.).

  • Event not covered: Mechanical failure/wear and tear, unspecified driver, insufficient coverage (e.g. Third-party cover only but no comprehensive coverage).

Contrary to popular belief, car insurance companies do not enjoy denying you your claim. However, there are instances, like those mentioned above, where they must uphold their policy limits.These limits, or policy exclusions, are a risk management tool insurers use to maintain financial stability and encourage responsible driving behaviour. If your insurer has rejected your claim, you can follow certain steps to dispute the decision. Follow your insurance provider's complaint process and submit a written account of the dispute, along with other required documents. If this fails, organise an assessment from an independent loss adjuster, who can make an impartial report and send it to your insurer. Alternatively, you can escalate the issue to the NFOSA (National Financial Ombud Scheme of South Africa), which handles financial services complaints and disputes

What is needed to claim from a car insurance provider?

The exact requirements of what you need to claim from an insurer will depend on your policy and the specific situation.

The exact requirements of what you need to claim from an insurer will depend on your policy and the specific situation.

To claim from an insurance company, you’ll typically need the following:

  • Documents: Your policy number, insurance proof, and other relevant documents.

  • Details: Of the incident (the date, time and location) and any police report or reference numbers.

  • Contact information: For any other parties involved in the accident, including their insurance details.

  • A detailed account: Of the damage to your vehicle, including photographs if possible.

The information above gives you a general idea of what we might require for your claim. 

The insurance company will then assess the claim, determine whether it is covered under the policy, and determine the next steps.

How long does it take for a claim to pay out?

The turnaround time for insurance claims depends on the complexity of the claim and the information provided.

The insurance company must first receive all the necessary information and documents to assess the claim. Then, it must determine whether the policy covers the incident. 

If the claim is approved, the insurance company will pay without delay. Straightforward claims, like a broken window or a minor collision, are resolved relatively quickly, and approval can happen within a few days. 

However, more complex claims take more time– as many as several weeks–to process and resolve.

It's essential to remember that the claims process can take even longer during busy periods, such as after a natural disaster or if the insurance company is dealing with a high volume of claims.

Some insurance companies have apps where clients can submit all the necessary information and receive an update on time. This tech-based solution helps to speed up the claims process. 

At Pineapple, our app streamlines the process by capturing essential information on the app. Then, our claims agents follow up by completing the rest of the information for you.

This ensures that the information and details surrounding your claim are accurately captured and allows you to ask questions along the way.

Can a car insurance company cancel my policy after a claim?

A car insurance company can cancel your policy because of the risk you pose to them.

Numerous claims can affect your risk, making you seen as unacceptable. The worse your risk profile gets, the higher your insurance premiums climb, possibly leading to your insurance provider cancelling the policy entirely.

The threshold for cancelling car insurance after multiple accidents differs by insurance companies, but the following variables usually determine this action:

  • The type of claim.
  • The amount paid.
  • Number of claims in a given period.

Before cancelling your policy, your insurance company should give you notice and state a valid reason for doing so, such as non-payment or multiple claims registered in a short period. 

Does claiming from car insurance impact my credit score?

Claiming from car insurance typically does not directly impact your credit score

Insurers don't report your premium payments to the credit bureaus, so your policy won't appear on your credit reports. The same is true for not paying your policy premium.

Insurance providers use separate databases to track your claim history. While a history of frequent claims can lead to higher premiums, it doesn't get reported to credit bureaus.

A final word

Don’t let the complicated jargon confuse you; insurance can be straightforward, provided you know all the right questions to ask.

Furthermore, familiarising yourself with the policy documents means knowing what your insurance does (and does not) cover. Understanding the claims process empowers you to navigate it smoothly.

We’ve saved you time by compiling this comprehensive list of questions and answers. You can thank us with a quick 90-second quote for comprehensive car insurance. 

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

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

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!

Get an Obligation-free Car Insurance Quote Online From Pineapple

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Disclaimer

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

Give us a follow

We post a lot of nonsense. Some of it’s even about insurance. Give us a follow. There’s a 43% chance you might actually enjoy yourself.