Insurance firm to pay ₹15,000 aid for causing mental harassment to city-based couple

District consumer disputes redressal forum directs the company, which failed to convey that it had decided to reject the complainants’ claim, to pay compensation and reconsider its decision

The district consumer disputes redressal forum directed an insurance company, which had failed to convey its decision to reject the couple’s claim, to pay the complainants ₹15,000 for causing mental agony and ₹10,000 as litigation expenses.

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The complainants Paramjit Kaur and her husband Harpreet Singh Lotey moved the forum on March 3, 2017, seeking refund of medical expenses amounting to ₹87,005. They also sought ₹20,000 as compensation for the mental agony the couple was subjected to and ₹10,000 as compensation for litigation expenses.

Kaur told the forum that she had purchased a health insurance policy from United Insurance Company Limited with her husband, which was renewed periodically. Under the policy, which was valid from July 8, 2016 to July 7, 2017, the couple could claim up to ₹4,25,000 from the insurance company.

Kaur told the forum that she was admitted to Pal Hospital, Model Town, as she experienced heavy bleeding, difficulty in breathing and severe pain in the abdomen.

“I underwent a laparoscopically assisted vaginal hysterectomy (LAVH)) and was discharged on November 21, 2015. The procedure cost ₹87,005 and we filed a claim with the insurance company on December 4, 2015, along with supporting documents, but they kept on postponing the matter on one pretext or the other. That claim has not been settled, despite repeated visits and a legal notice was served on December 2, 2017,”wrote Kaur in her complaint.

Insurance company’s response

In its response, the insurance firm, alleged that the couple had suppressed material facts. The firm said, “Admittedly, the couple took an individual health insurance policy, which was valid from July 8, 2015 to July 7, 2015 and the complainant was admitted to Pal Hospital from November 17, 2015, to November 21, 2015 and thereafter, filed a reimbursement claim,which was substantiated with medical bills, test reports and prescription slips, including records of medical history. “

However, the firm said it emerged that Paramjit, had also been admitted to the hospital two years before the recent hospitalisation as she experienced heavy bleeding and abdominal pain. It maintained that since the disease was pre-existing, the claim was not admissible.

“Therefore, the TPA (third party administrator) repudiated the claim of the complainant on June 15, 2017, as per the terms and conditions of the insurance policy,” stated respondent in its reply to the court.

Court’s observation

The court observed that the firm had failed to substantiate the claim that the ailment pre-existed before the hospitalisation period with an affidavit of the treating doctor or record of the hospital she was treated at, it appeared that the complainant had been suffering from the ailment at the most 100 days before she was admitted in the hospital (April 2015 onwards). However, the policy came in effect from July 8, 2014.

It also observed that the decision to reject their claim was never conveyed to the complainant and as such the insurance company should reconsider the claim of complainants and give the complainants an opportunity to show that the ailment in question was not a pre-existing disease.