Recently, a complaint was filed alleging that an insurance claim for medical expenses was unjustifiably denied by the United India Insurance Company Limited (OP), despite holding a valid policy. The complainant’s wife had to be hospitalized on March 31, 2023, for acute stomach pain and urinary issues. Despite multiple treatments and follow-ups, the insurance company rejected the claim on October 31, 2023, citing that the hospitalization lasted less than 24 hours, which did not meet the policy’s requirements for claim eligibility.
The complainant argued that modern medical advancements allow for short-term hospital stays and that “day-care treatment” is covered under the policy, making the claim valid despite the brief hospitalization. The insurance company countered that the claim was rejected based on policy terms requiring a minimum 24-hour stay, and further alleged that the complainant had suppressed material facts.
The District Consumer Dispute Redressal Commission (DCDRC) observed that the complainant’s wife received timely medical treatment, leading to her recovery and discharge within 13-14 hours. While clause 15 of the insurance policy required a minimum 24-hour hospitalization, the commission noted that “clause 8 covers day-care treatment” and that the policy should be interpreted in light of medical advancements. The Commission further observed, “It is not rewriting the contract, but a harmonious interpretation of the insurance policy’s clauses, considering the advanced medical procedures and emergent nature of the situation”,The Commission rejected it in light of medical advancements. The Commission rejected the United India Insurance Company Limited (OP), claim of fraudulent intent and reliance on irrelevant precedents, concluding that the rejection of the insurance claim was “unjustified” and amounted to “deficiency in service”.
The Commission held that the repudiation of the insurance claim was unjustified and amounted to a deficiency in service. It directed the United India Insurance Company Limited (OP), to reimburse to a deficiency in service. It directed the United India Insurance Company Limited (OP), to reimburse the medical expenses of Rs. 7,13,525 along with 6% interest per annum from the date of filing the complaint. Additionally, the complainant was awarded Rs. 75,000 as compensation for mental harassment and Rs. 11,000 for litigation costs. The Commission further directed the compensation of Rs. 5,000 towards mental agony and harassment and cost of Rs. 3,000. The order reinforce that insurance companies cannot strictly rely on traditional clause when dealing with claims arising from emergent situations involving advanced medical treatments.