Do you know why motor insurers don’t cover consequential damages? Buying a car was the easy part. But then comes the tough bit—meeting the expenses for damages arising from any untoward accidents. And you had that covered as well, with a motor vehicle insurance policy, or so you thought. And that is where you could go wrong. Consequential damages are not cover by most of the motor insurers.
Rakesh Goyal, Director, Probus Insurance Broker, said, “Consequential damages or losses are a type of collateral damage. Such damage to any part or tangible unit of your vehicle is like an indirect loss that cannot be compensate, under your regular motor insurance policy, even if your vehicle is cover.”
For instance, your insurance will cover the expenses for plugging an engine oil leak immediately after an accident. But if there is a problem later on, after the leak is plugged, causing the engine to stall. It is classified as consequential damage arising out of the accident and will not be cover under your regular motor insurance policy.
As per motor insurance regulations, insurers don’t cover consequential damages under a motor insurance policy. This is because the damage is a consequence of a certain action and not the outcome of an uncertain event. In other words, consequential damage happens when one uncertain event leads to a series of other events, causing damage that was not the result or outcome of the first uncertain event.
Pooja Yadav, chief product officer of Edelweiss General Insurance, said, “If an insured car meets with an accident on the road, it will have to be tow away to the nearest garage. Such damages will be treat as consequential damage.”
Follow us on Instagram, Facebook, Twitter, Linkedln, Pinterest.
