Motor Insurance Claim Rejected or Delayed? Your Recourse in India (2026)

Motor is over a quarter of all Insurance Ombudsman complaints in India. Here is why car and bike insurance claims get rejected or stuck, and the exact escalation route to get paid.

Motor insurance has one of the highest settlement ratios in Indian insurance and still generates more Ombudsman complaints than almost any other line. Both things are true because motor claims fail in a narrow, predictable set of ways — and most of them are arguable.

How common are motor insurance claim disputes in India?

The motor own-damage portfolio recorded a claim settlement ratio of 99.10 per cent in FY2023-24. Yet motor accounted for 26.18 per cent of all complaints received by the Insurance Ombudsman that year — more than a quarter of every insurance grievance in the country. Source: IRDAI Annual Report 2023-24.

The gap is explained by disallowance rather than outright refusal. Motor claims are frequently settled, but settled for far less than the policyholder expected, after depreciation, salvage and non-payable parts are applied.

Why motor insurance claims get rejected in India

• Driving licence invalid, expired, or not valid for that vehicle class at the time of the accident
• Driving under the influence of alcohol or drugs
• Vehicle used for a purpose the policy does not cover, such as a private car used commercially
• Delay in intimating the insurer, particularly where the delay prevented a proper survey
• Consequential damage — for example engine seizure after driving a waterlogged car, which is treated as a consequence of the driver action rather than the flood itself
• Unauthorised repairs started before the surveyor inspected the vehicle
• Modifications to the vehicle not declared to the insurer
• No FIR where the circumstances required one, especially theft and third-party injury

Most motor disputes are not about whether the accident happened. They are about depreciation, non-payable parts, and whether the surveyor assessment was reasonable.

Delay is a separate problem with its own rules

IRDAI has tightened motor claim timelines. Insurers are expected to appoint a surveyor within 24 to 72 hours of intimation and settle claims within 30 days of receiving the final survey report and required documents. For losses below Rs 50,000, a survey by a registered surveyor is not mandatory and insurers may use app-based or AI-assisted assessment, which is intended to speed up small claims rather than delay them.

If your claim is sitting beyond those windows without a written explanation, the delay itself is a ground for complaint, independent of the merits of the claim.

What to do when a motor claim is rejected or stuck

• Obtain the written repudiation or the survey report, and the itemised deduction sheet if the dispute is about quantum.
• Check the surveyor assessment line by line — depreciation rates on plastic, metal and rubber parts are defined, not discretionary.
• If a zero-depreciation add-on was purchased, confirm whether it was applied. This is a very common oversight.
• Preserve photographs of the damage, the FIR where applicable, and the original repair estimate.
• Escalate in writing to the insurer grievance redressal officer, then IRDAI Bima Bharosa, then the Insurance Ombudsman.

The Ombudsman route is free and its award binds the insurer — see our step by step Ombudsman filing guide.

Third-party claims work differently

A third-party injury or death claim is not settled by the insurer at its discretion. It goes to the Motor Accident Claims Tribunal, which determines compensation. Third-party liability cover under a motor policy is unlimited for death or injury, so the dispute there is about quantum and liability rather than whether cover exists.

Related: RiskPe's claim recovery service reviews rejected and short-paid motor claims, including disputed surveyor assessments.

Also read: motor insurance advisory in Jaipur and which insurers get the most complaints.