Car Insurance Basics

5 Ways You Could Lose Your Insurance

November 12, 2014

The chief reason why every car owner takes a cover with a Motor Insurance provider is to ensure that if something went wrong with their car, they will have someone to fall back on. The tragedy is that not all claims made to Motor Insurance companies in kenya result in compensation. This is why it is very critical to understand reasons why insurance companies decline to pay claims, in order to avoid such an eventuality. The chief cause of invalid claims is failure to understand what ones policy document contains, in one word, ignorance. Here are five things that can make you lose your compensation.

1. Non Disclosure (of Vehicle Modifications)

When a car undergoes modifications for any purpose, its critical to notify your insurer. This is best done when renewing your cover. One of the common modifications on Kenyan cars is the fitting of spaces into the suspension units to raise the car. While this is a practical solution to Kenyan driving conditions, an insurance company can refuse to pay a claim of the car overturns. Raising a car affects the centre of gravity of the car, and may lead to instability at cruising speeds. Therefore, a claim made after a car rolls can be invalidated as a result of such a modification.

2. Driving with an Invalid License

Driving without a valid licence is not only illegal, but is also a danger to your insurance cover. Insurance companies demand that you drive only under legally acceptable conditions. Apart from the validity of your licence, it is also important to note that the classification of the licence may affect your insurance. If you are licenced to drive one type of vehicle, and you cause an accident while driving another class of vehicle, the insurance company covering the car you were driving can decline to honor the claim.

3. Attempted Fraud

Attemped fraud is also a reason for declined claims by motor insurance companies. Auto insurance companies are vulnerable to fraud. This makes them very keen on how they respond to claims. It is not uncommon for someone to make a theft claim for their car after conspiring to make it disappear. If an insurance company finds evidence of fraud in a claim, the company will not honour the claim.

4. Wrong Use of Car

Another reason for denied claims is the wrong use of an insured car. When a car insurance company issues a policy, it bases it calculation of premiums on the intended usage of the car. For instance, Public Service Vehicles (PSVs) tend to attract higher premiums because of higher incidents of accidents involving PSVs. If your car is registered as a private car, and it gets involved in an accident while doing commercial work, then your insurance company may decline to honour your claim.

5. Involvement in Criminal Activity

Motor insurance companies also refuse to honour claims arising from accidents that take place when the car is being used for criminal purposes. If a car is damaged by police bullets because the owner allowed it to be used as a gateaway vehicle in a crime, no insurance company will honour such a claim. It is important to ensure that you are aware of what your car is doing at all times, especially if it has multiple drivers. 

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