Theft is common and being insured against it, especially for expensive items, is a good idea. However, once you have insured your belonging against theft it is necessary that you take some steps to ensure that should you have to approach your insurer for a loss, your claim will not be rejected.
One of the basic requirements for your theft claim to be honoured by your insurer is to have a ‘non-traceable certificate” issued by the police. “ The local police station has to issue a ‘Non Traceable Certificate’ which normally takes between 1 to 3 months. Most theft claims fail to reach this stage of getting a ‘Non traceable certificate’ and hence they are rejected,” Nikhil Apte, Chief Product Officer, Royal Sundaram General Insurance said told FeMoney.
K G Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance says that filing of a First Information Report (FIR) with police could be mandated under the policy terms and not going through the exercise can lead to claim rejection. “If the policy mandates filing of FIR for a Property theft claim, the claim can be rejected in case no FIR is filed,” he said.M Ravichandran, President, Insurance, Tata AIG General Insurance lists out some of the common grounds for rejection of theft claim by insurance companies.
Here are the scenarios under which the theft/burglary claims are rejected:
Unoccupied Property: Where the building insured or containing the insured property becomes unoccupied and remains so for a period of more than the number of days mentioned in the policy (for example 7 days) at a stretch. Insurance ceases as regards such a property affected unless the insured, before the occurrence of any loss or damage, obtains the sanction of the company, signified by endorsement upon the policy.
Delay in intimation of claims to insurance company: In case of an event that gives rise to a claim under the policy, the insured has to inform the insurance company within the stipulated time period mentioned in the policy.
Delay in registering FIR with the police: The insured should without any delay lodge a written complaint with the police listing out the items and values that were lost, damaged or destroyed in case of actual or attempted burglary or theft. Delay in registration of FIR may lead to rejection of claim.
Misrepresentation of material facts: Any misrepresentation of material facts/information contained in the proposal (which forms the basis of Insurance contract) may lead to rejection of claims. Any change in information contained in proposal or any other material change in circumstance such as change in address, any structural alteration or expectation/knowledge that home will be unoccupied, needs to be intimated to the insurance company.
Non-compliance of security requirement: Sometimes the policy is subject to having 24 hrs watchman or an alarm system. Absence of these may lead to rejection.
Involvement of insured’s employee/staff: Loss or damage where any inmate or member of the insured’s household or of his business staff or any other person lawfully in the premises is concerned in the actual theft or damage to any of the articles or premises or where such loss or damage has been expedited or in any way assisted or brought about by any such person or persons.