Your motor insurance claim was rejected. A breach has to actually cause the loss.
Insurers reject own-damage motor claims on technical breaches. Where the breach had nothing to do with how the loss happened, that rejection can fail — here's when, and exactly how to challenge it.
Reviewed by the BimaHaq Insurance Grievance Desk — BimaHaq's in-house insurance-grievance team — specialists in IRDAI grievance redressal, the Insurance Ombudsman process, and policyholder rights in India. · Last reviewed 2026-10-26
An own-damage motor claim cannot be repudiated in full for a policy breach that is not germane to the loss. The Supreme Court has held that where the breach — a use-class technicality, a licence irregularity — had no causal connection to how the damage occurred, the insurer cannot repudiate the claim in full; a 'non-standard' settlement may be the route instead. The 2024 IRDAI rules add that a claim cannot be repudiated for delay that did not increase the loss, or closed merely for want of documents.
Why insurers reject on this ground
Motor own-damage claims are refused for late intimation or a delayed FIR, for a driving-licence or permit/use-class technicality, for an allegation of drunk driving, or for damage said to be pre-existing or outside the policy.
When you can challenge it
The governing test is a causal nexus between the breach and the loss. In National Insurance v. Nitin Khandelwal (2008) the Supreme Court held that in a theft claim a use-condition breach is 'not germane' and the insurer cannot repudiate in toto; in Amalendu Sahoo v. Oriental Insurance (2010) it applied insurers' own non-standard-settlement guidelines to pay part of the claim instead of nothing; and in Jitendra Kumar v. Oriental Insurance (2003) it held a licence defect that had nothing to do with the loss cannot defeat the claim. For delay, the Supreme Court (three judges, Civil Appeal No. 653 of 2020, 24 January 2020) held that where the FIR was lodged immediately after the theft, the vehicle was reported untraced and the insurer's surveyors found the claim genuine, mere delay in intimating the insurer cannot be a ground to deny the claim; and IRDAI's Master Circular on General Insurance Business (2024) bars repudiation for a delay that has not increased the assessed loss. For a drunk-driving refusal, IFFCO Tokio v. Pearl Beverages (2021) puts the burden on the insurer to prove impairment. On quantum, standard depreciation on replaced parts follows a fixed schedule (50% on rubber/plastic parts, nil on glass, and by vehicle age for the rest) — a zero-depreciation add-on removes it. On a total loss, IRDAI's Master Circular on General Insurance Business (2024) requires the insurer's own criteria for a total or constructive total loss to be published on its website and in your Customer Information Sheet; and if it assesses the vehicle as unrepairable, a wreck, it must give you the option of keeping the wreck and accepting a 'cash loss' settlement — the IDV less the assessed value of the salvage. If you take that option, the insurer may cancel the own-damage cover from the date of damage, and the third-party cover unless you cancel the wreck's registration or insure the wreck for third-party risk.
How to fight this rejection
- 1
Get the written rejection and the exact clause
Obtain the repudiation letter citing the specific policy condition, plus the surveyor's report and your policy wording, so you know precisely which breach the insurer is relying on.
- 2
Test the causal nexus
Ask whether the breach the insurer cites actually caused or contributed to the loss. A use-class, licence, or intimation-delay point that had no bearing on how the damage happened cannot, on settled Supreme Court authority, defeat the claim in full.
- 3
Push for non-standard settlement, not rejection
Where a breach is not germane to the loss, the remedy is a proportionate 'non-standard' settlement, not zero. Cite this in your grievance and ask for the survey report the insurer must obtain within 15 days of allocation.
- 4
Raise a written grievance with the insurer's GRO
Send a dated grievance to the insurer's Grievance Redressal Officer setting out why the rejection is wrong. The insurer must acknowledge it immediately and resolve it within 14 days.
- 5
Optionally, complain to IRDAI on Bima Bharosa
If it isn't resolved in time or the reply is unsatisfactory, you can also register the complaint on IRDAI's Bima Bharosa portal. It is optional: the Insurance Ombudsman does not require it.
- 6
Take it to the Insurance Ombudsman
Free, and the award binds the insurer. The Ombudsman can award up to ₹50 lakh — a cap on the award rather than the claim. File within one year of receiving the insurer's rejection — or, if it never replied, within one year of one month after you sent your representation.
Common questions
Can a motor claim be rejected because the driver's licence was invalid?
Not automatically. The Supreme Court has held (Jitendra Kumar v. Oriental Insurance) that a licence defect cannot defeat an own-damage claim where it had nothing to do with the loss — there must be a causal connection between the breach and the damage.
My claim was rejected only because I intimated late. Is that valid?
Not on that ground alone. IRDAI's Master Circular on General Insurance Business (2024) bars repudiation for a delay that has not increased the assessed loss, and IRDAI's 2024 Master Circular on policyholders' interests says no claim shall be rejected or closed for delayed intimation. In a theft claim, the Supreme Court has held that where the FIR was lodged immediately, the vehicle was reported untraced and the insurer's surveyors found the claim genuine, mere delay in intimating the insurer cannot be a ground to deny it (Civil Appeal No. 653 of 2020, 24 January 2020).
The insurer says I was driving drunk. Who has to prove it?
The insurer — but read the case whole, because it helps them too. In IFFCO Tokio v. Pearl Beverages (2021) the Supreme Court held the burden is on the insurer and that mere consumption is not enough: what must be shown is that the driver's faculties were disturbed so that driving was impaired, not the 30mg/100ml criminal threshold under s.185 of the Motor Vehicles Act. The same judgment holds that no breath-analyser or blood test is essential — circumstances associated with the effects of alcohol can prove it. So the absence of a test is not the end of the insurer's case, and it should not be argued as though it were.
Why was so much depreciation deducted from my claim?
Partial-loss motor claims apply a standard depreciation schedule to replaced parts — 50% on rubber/plastic parts, tyres and batteries, nil on glass, and a rising percentage by vehicle age for other parts. A zero-depreciation ('nil dep') add-on removes these deductions, usually for newer vehicles.
What is a 'non-standard' settlement?
It is a proportionate payment insurers make where a policy breach is not fundamental to the loss, instead of rejecting the claim outright. The Supreme Court has upheld this approach in place of total repudiation.
What BimaHaq costs, if you want help with this:
Fixed fees, never a share of your claim. No outcome is guaranteed. See all prices
This guide is general information about the insurance-grievance process in India, not legal advice, and figures (timelines, monetary limits, jurisdiction) can change — verify against the official sources linked above before you rely on them.