The District Consumer Disputes Redressal Commission in Noida has directed Iffco Tokio General Insurance Company to pay Rs 62,930 along with 6 percent interest to a policyholder whose medical claim was wrongfully rejected. Additionally, the insurer has been ordered to pay Rs 4,000 towards litigation costs and compensation for mental agony.
Background of the Case
Ajay Kumar, a resident of Greater Noida, filed a complaint on February 7, 2024, alleging that the insurance company rejected his medical claim on the grounds that hospitalization was unnecessary and that outpatient treatment would have sufficed. Kumar had purchased the Swasthya Kavach Floater policy in 2017 with a sum assured of Rs 5 lakh. The policy was renewed annually, with the last renewal on December 13, 2022, after paying a premium of Rs 14,830. The policy covered his wife, son, and daughter.
Hospitalization and Claim Rejection
On October 30, 2023, Kumar was admitted to the emergency department at Kailash Hospital. According to the doctor's report, immediate admission was advised, and the hospital sent an approval request with an estimated cost of Rs 56,000. Despite submitting the query letter and doctor's certificate to the insurer, the cashless treatment request was denied, forcing Kumar to pay the hospital bills out of pocket. Kumar later learned from insurance officials that the claim was rejected because his illness was deemed not severe enough to require hospitalization.
Kailash Hospital sent a letter requesting reconsideration and approval for the cashless claim, but the insurer ignored this request. Kumar stated, 'My claim was arbitrarily rejected, which is nothing but deficiency in service.'
Insurer's Defense
The insurer's counsel submitted a counterclaim refuting the allegations, stating that after examining the documents, it was found that the patient was admitted for a condition that could have been treated in the outpatient department. The counsel argued that hospitalization was not required, and therefore the cashless treatment facility was denied. They also claimed that a claim cannot be approved if a person fails to disclose pre-existing medical conditions, as concealing information renders the policy void. In this case, the complainant did not disclose his illness, according to the insurer.
Commission's Observations
After examining documents provided by both parties, the commission noted, 'The doctor only will determine whether the complainant's illness will be treated in an outpatient setting or in hospital. The patient was admitted, considering abdominal pain, high fever, and vomiting, as evidenced by the doctor's discharge summary. How did the defendant conclude that the illness could only be treated in an outpatient setting?'
The commission declared the insurer's actions as deficiency in service and ruled in favor of the complainant.
