Your motor insurance claim was rejected. A breach has to actually cause the loss.
Insurers reject own-damage motor claims on technical breaches that often have nothing to do with how the loss happened. Here's when that rejection fails — 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 2026-07-11
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 repeatedly held that where the breach — a use-class technicality, a licence irregularity — had no causal connection to how the damage occurred, the insurer must settle, often on a 'non-standard' basis (commonly up to 75% of the admissible claim) rather than reject outright. 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, Gurshinder Singh v. Shriram (2020) held that mere delay in intimating a theft cannot deny a genuine, FIR-supported claim, and the 2024 Master Circular bars rejection for delay that did not increase 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 — and a total loss is paid at the Insured's Declared Value less the wreck.
How to fight this rejection
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.
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.
Push for non-standard settlement, not rejection
Where a breach is not germane to the loss, the remedy is a proportionate 'non-standard' settlement (commonly up to 75% of the admissible amount), not zero. Cite this in your grievance and ask for the survey report the insurer must obtain within 15 days of allocation.
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.
Escalate to IRDAI on Bima Bharosa
If it isn't resolved in time or the reply is unsatisfactory, register the complaint on IRDAI's Bima Bharosa portal.
Take it to the Insurance Ombudsman
Free, binding on the insurer, and open to claims up to ₹50 lakh — file within one year of the insurer's rejection or final reply.
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?
Often not. In Gurshinder Singh v. Shriram General Insurance (2020) the Supreme Court held mere delay in intimation cannot deny a genuine theft claim supported by a prompt FIR, and the 2024 IRDAI Master Circular bars repudiation for delay that has not increased the assessed loss.
The insurer says I was driving drunk. Who has to prove it?
The insurer. In IFFCO Tokio v. Pearl Beverages (2021) the Supreme Court held the insurer may prove intoxication by evidence other than a breath test, but the burden is on it, and the mere presence of some alcohol without perceptible impairment is not enough.
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 — commonly up to 75% of the admissible claim — instead of rejecting the claim outright. The Supreme Court has upheld this approach in place of total repudiation.
See the full escalation ladder for a rejected claim, or use a free complaint-letter template.
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.