Himachal Pradesh State Commission Holds United India Insurance Co. Liable For Wrongful Repudiation Of Valid Claim

The State Consumer Disputes Redressal Commission, Himachal Pradesh bench of Justice Inder Singh Mehta (President) held 'United India Insurance Company Limited' liable for wrongful repudiation of a medical claim based on erroneous interpretation of the policy's clauses. The Insurance Company also failed to provide any evidence for the alleged pre-existing disease of the Complainant.

Brief Facts:

The Complainant availed the Mediclaim policy under the Arogya Raksha Plan-B from the United India Insurance Co. Ltd. (“Insurance Company)”. The policy covered him and his wife for a sum assured of Rs. 5 Lakh. One month after purchasing the policy, the Complainant's wife began experiencing mobility issues, and she was taken to Max Super Speciality Hospital (“Hospital”). After undergoing various tests, she was admitted to the Hospital, where she underwent bilateral knee replacement surgery. The Complainant incurred a total expenditure of Rs. 3,81,436/- for her treatment. He submitted a claim to the Insurance Company for reimbursement.

However, the Insurance Company repudiated the claim. It stated that the treatment for 'Bilateral Knee Osteoarthritis with Varus Deformity' fell under a condition not covered during the first year of the policy. Feeling aggrieved, the Complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission, Una, Himachal Pradesh (“District Commission”). The District Commission dismissed the complaint. Dissatisfied by its decision, the Complainant filed an appeal before the State Consumer Disputes Redressal Commission, Himachal Pradesh (“State Commission”).

In response, the Insurance Company contended that the claim was justifiably repudiated, as the surgery occurred within four months of the policy issuance, and any treatment related to pre-existing conditions was excluded for the first 48 months.

Observations of the State Commission:

The State Commission observed the condition stated by the Insurance Company for repudiating the claim, was not applicable to the Arogya Raksha Policy. The special conditions pertaining to the policy specifically created an exception for group health insurance policies. Therefore, it was held that the Insurance Company's interpretation was incorrect.

The State Commission also addressed the Insurance Company's argument regarding a pre-existing disease. It was held that no evidence had been provided to prove that the Complainant's wife was suffering from such a condition. As a result, this defence by the Insurance Company was deemed invalid.

As a result, the State Commission concluded that the Insurance Company's repudiation of the claim was unjustified and amounted to a deficiency in service. It directed the Insurance Company to pay Rs. 3,71,436/- with 9% interest to the Complainant. Additionally, the Insurance Company was ordered to pay Rs. 40,000/- as compensation for harassment and mental agony, and Rs. 30,000/- towards litigation costs.

Case Title: Sh. Naresh Kumar Chabba vs The United India Insurance Company Ltd. and Anr.

Case No.: First Appeal No. 115/2022

Advocate for the Appellant/Original Complainant: Ms Divya Raj Singh

Advocate for the Insurance Company: Mr P.S. Chandel

Date of Decision: 25th September 2024

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