Engine damaged in waterlogging or a flood — claim rejected as 'consequential damage'

One insurer's standard private car wording covers flood and inundation but excludes consequential loss and mechanical or electrical breakdown, and an insurer may treat engine damage caused by water getting into the engine as consequential. An engine-protection add-on, if your schedule lists one, is written to cover that kind of damage. Check the schedule for the add-on, read the surveyor's description of how the damage happened, and answer the insurer's reason on those facts.

Every monsoon, cars stall in water. Whether the engine repair is paid tends to turn on two questions: was the damage caused by the flood itself, or by something that followed it; and did you buy an add-on that covers it.

What the standard policy says

• Covered.: One insurer's private car wording covers loss or damage to the vehicle 'by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost'.^[1]
• Excluded.: The same wording excludes 'consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages', and its summary sheet gives mechanical failure and wear and tear as causes the standard policy does not cover.^{[1, 2]}
• After the event.: The example wording says that if the vehicle is driven before the necessary repairs, any further damage is at your own risk.^[1]

What an engine-protection add-on changes

In the example insurer's range, the Engine Protect add-on covers repair or replacement costs for consequential damage arising out of water ingression, or leakage of lubricating oil or coolant, leading to loss or damage to the engine and its parts. If your schedule lists such an add-on, a 'consequential damage' refusal of that kind is the loss it is written to cover, so read its own conditions and limits and put them to the insurer.^[2]

What to check if you have no add-on

• The surveyor's report: how it describes the cause of the engine damage, and on what evidence.
• The split: whether the insurer has paid the body, interior and electrical damage caused directly by the water and refused only the engine. Ask for the assessment item by item.
• Your timeline: when the car was submerged, whether anyone tried to start or drive it, when it was towed, and when the insurer was told. Photographs of the water level and towing receipts help.
• The exact clause in the letter, and whether it says 'consequential' or 'mechanical breakdown'.

How to respond

1. 1

   Get the clause and the survey report in writing.

   Ask the insurer for both, quoting the claim number.

2. 2

   Write to the grievance officer.

   Answer the cause of the damage with your timeline and photographs. The insurer should resolve the complaint within 14 days.^[3]

3. 3

   Escalate if needed.

   The Insurance Ombudsman can hear complaints about partial or total repudiation of a claim, once the insurer has rejected your written complaint, not replied within one month of receiving it, or replied unsatisfactorily. The complaint must be made within one year of receiving the insurer's decision or, if it never replied, of the end of one month after you sent your complaint.^[4]

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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