Hospitalization Need Not Be For 24 Hrs For Insurance Claims, Ferozepur Commission Ordered New India Assurance Co. To Pay Rs. 22.5k And 5k Litigation Cost

Brief Facts:

Darshan Kumar (“Complainant”) held a ‘New India Flexi Floater Group Mediclaim policy’ (“Policy”) rolled out by the New India Assurance Company Limited (“Insurance Company”) in collaboration with Canara Bank, Ferozepur City. He and his wife, Raj Dulari, were insured under the policy. The policy was valid from 3.06.2019 to 2.06.2020, with a sum insured of Rs. 3,50,000/-. During this period, Raj Dulari was hospitalized at PGI Chandigarh (“Hospital”) from 30.1.2020 to 31.1.2020, incurring medical expenses of Rs. 22,576/-. Cashless facility was not available at the hospital, so the complainant submitted all necessary documents for reimbursement to the insurance company. However, the claim was denied by the insurance company, citing clause 3.14.1 of the policy, which stated that hospitalization required a minimum 24-hour stay. Alleging this denial as incorrect and illegal, the complainant filed a consumer complaint against the insurance company and other parties involved, before the District Consumer Disputes Redressal Commission, Ferozepur (“District Commission”).

The insurance company asserted that the complainant did not approach the District Commission with honesty and integrity. They further contended that the reimbursement claim for Raj Dulari, who suffered from diabetic macular edema, was denied because the treatment involved intravitreal lucentic injection, which was not covered under the policy's day care list of procedures. Consequently, the claim was repudiated based on policy clause 3.14.1, as the hospitalization was for less than 24 hours.

On the other hand, the complainant argued that it is generally seen that insurance companies are only interested in earning the premiums and find ways and means to decline valid and genuine claims. The insurance company wrongly and illegally repudiated the claim of the complainant on the lame excuse and flimsy ground/remarks.

Observations of the Commission:

The District Commission perused the evidence on record to hold that there was no dispute in relation to the policy particulars, period of policy and the sum insured. The District Commission further observed that advancements in medical technology have led to situations where patients are sometimes treated quickly or without extended hospital stays. If a patient receives treatment shortly after admission or without formal admission due to these new methods, the insurance company should not deny the claim based on non-admission. Consequently, it was held that the insurance company unjustly rejected the complainant's valid claim without reasonable justification. The District Commission went on to remark that insurance companies often attract customers with promising policies but often resort to various excuses to deny claims. In this case, the policy did not explicitly exclude coverage for the specific eye treatment.

Thus, the insurance company was held liable for deficiency in service. The insurance company was directed to pay Rs. 22,536/- along with interest @6% per annum from filing of the complaint till its realization with 45 days from the date of receipt of copy of the order. An additional compensation of Rs. 5000 was ordered to be paid by the insurance company for deficiency in service and litigation costs.

Case: Darshan Kumar vs New India Assurance Company Limited and others

Case No.: C.C. No.268 of 2020

Advocate for the Complainant: Sh. Jatin Handa

Advocate for the Opposite Parties: Sh. Harish Chawla (For New India Assurance Company Limited); Exparte (For Health India Insurance T.P.A. Services Pvt. Ltd); Sh. Devesh Kakkar (For Canara Bank)

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