Consumer court slaps ₹69K fine on insurance firm for denying claim

The District Consumer Disputes Redressal Commission-2, Chandigarh, in a scathing order, directed Aditya Birla Health Insurance to reimburse the medical expenses incurred by the insured

“It has become a common practice for insurance companies to show all kinds of green pastures to the customers at the time of selling policies, but when it comes to payment of claims, they invent all sorts of excuses to deny them,” observed the consumer court while delivering a stinging rebuke to Aditya Birla Health Insurance on Monday.

During the proceedings, the court found that the insurance company had acted arbitrarily in rejecting the claim, emphasizing that the treating physician is the sole authority to determine the necessity of a patient’s admission. (Shutterstock)

The District Consumer Disputes Redressal Commission-2, Chandigarh, in a scathing order, directed Aditya Birla Health Insurance to reimburse the medical expenses incurred by the insured, Sanjeev Rana, and also pay ₹15,000 as compensation for mental harassment and litigation costs.

Rana, a resident of Sector 38 West, Dadumajra, had purchased a health insurance policy called Active Assure Diamond, providing coverage of ₹5 lakh. In April 2024, he experienced severe dehydration and increased creatinine levels, necessitating admission to Max Super Specialty Hospital, Mohali. While the hospital duly submitted the claim to the insurance provider, Aditya Birla Health Insurance rejected it, contending that Rana’s admission was unnecessary and his treatment could have been managed in the outpatient department (OPD) itself.

Challenging this decision, Rana filed a complaint with the consumers court. During the proceedings, the court found that the insurance company had acted arbitrarily in rejecting the claim, emphasising that the treating physician is the sole authority to determine the necessity of a patient’s admission.

Commission Chairman Amarinder Singh Sidhu and member Brij Mohan Sharma ordered the insurance company to pay ₹54,228, along with interest, representing the medical expenses incurred by Rana. In addition, they imposed a compensation of ₹15,000 for the mental anguish and legal expenses he endured.

The commission expressed its strong disapproval of the arbitrary practices employed by insurance companies, stating that while they readily accept premiums, they resort to unreasonable pretexts when claims are filed. The commission has mandated that the insurance company comply with the order within 60 days. This case serves as a reminder that consumers have recourse against unfair practices in the insurance sector.