Can't Repudiate Claim For Undisclosed Medical Condition Discovered Later, Bangalore District Commission Holds HDFC ERGO Health Insurance Liable

Brief Facts:

The Complainant was self-employed as a web developer and French teacher. He acquired a health insurance policy from Apollo Munich Health Insurance (now known as HDFC ERGO Health Insurance) and consistently paid the premiums. This policy was renewed annually without interruption. Subsequently, the Complainant was hospitalized for treatment and submitted a claim to the insurance company. However, the insurance company rejected the claim, stating that the Complainant failed to disclose a pre-existing ailment at the time of purchasing the policy. Feeling aggrieved, the Complainant filed a consumer complaint in the Additional District Consumer Disputes Redressal Commission-III, Bangalore Urban, Karnataka (“District Commission”) against the insurance company.

In response, the insurance company argued that the Complainant concealed a material fact regarding his health when he initially purchased the insurance policy. It argued that this non-disclosure justified its decision to repudiate the claim. Therefore, it argued that there was no deficiency in service on its part.

Observations by the District Commission:

The District Commission noted that the insurance company repudiated the claim on grounds that the Complainant failed to disclose a history of Steven Johnson Syndrome, a condition known since childhood, at the time of purchasing the policy. The rejection was based on the Complainant's hospitalization for nasal obstruction.

Upon reviewing the discharge summary and medical certificates submitted by the Complainant, the District Commission noted that the treatment at Apollo Spectra Hospital was unrelated to Steven Johnson Syndrome or any undisclosed pre-existing conditions. The District Commission found that the insurance company did not present evidence to challenge the authenticity of these medical documents. The District Commission held that it is the responsibility of the insurer to thoroughly ascertain the insured's health status before policy issuance. Therefore, any subsequent discovery of undisclosed medical history cannot be grounds for repudiating a claim if the insured did not deliberately conceal relevant information.

Consequently, the District Commission directed the insurance company to pay Rs. 1,76,438/- for medical expenses incurred by the Complainant. It was also directed to pay a compensation of Rs. 15,000/- to the Complainant along with Rs. 10,000/- towards litigation costs incurred by the Complainant.

Case Title: Chetan Stanely Crasta vs HDFC Ergo General Insurance Co. Ltd. and Anr.

Case Number: Consumer Complaint No. 283/2023

Date of Order: 12.06.2024

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