Lack Of Efforts By Insured To Review Policy Terms, Maharashtra State Commission Allows Appeal Filed By ICICI Lombard Insurance Co.

Brief Facts:

The Complainant, a practising Advocate residing in Mumbai, approached the ICICI Lombard General Insurance Co. Ltd. (“Insurance Company”) for a 'Health Protect Insurance Policy' covering hospitalization for himself, his wife, and two daughters. Subsequently, the Insurance Company issued the policy for a period from 02/08/2014 to 01/08/2016, with a total sum assured of Rs. 3,60,000/-.

It was contended by the Complainant that he was diagnosed with Bilateral Inguinal Hernia on 16/02/2015 which made it necessary for urgent hospitalization and surgery, for which he duly informed the Insurance Company. Despite submission of the Claim Form and mandatory documents the Insurance Company allowed the claim partly and issued a cheque for Rs.1,20,000/-. The Complainant argued that the policy covered hospitalization and the Insurance Company wrongfully rejected the claim. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Central Mumbai, Maharashtra (“District Commission”) and filed a consumer complaint against the Insurance Company.

The Insurance Company argued that the claim was partly allowed in accordance with the policy's mandatory extensions, which capped the liability for hernia-related surgeries at Rs. 60,000/-. It argued that the Complainant's Bilateral Inguinal Hernia fell under this limit, and any excess amount was rightly rejected as per the policy's terms and conditions.

The District Commission allowed the complaint and directed the Insurance Company to pay Rs. 87,774/- along with interest and additional compensation to the Complainant. Dissatisfied with the order of the District Commission, the Insurance Company filed an appeal to the State Consumer Disputes Redressal Commission, Maharashtra (“State Commission”).

Observations by the District Commission:

The State Commission noted that the Insurance Company duly issued a letter to the Complainant, inviting him to review the policy document and raise any discrepancies within a specified timeframe. However, the Complainant did not respond to this communication which indicated a lack of effort on his part to verify the policy's terms and conditions.

The State Commission held that an insurance policy constitutes a binding contract between the insurer and the insured. Therefore, it held that an adjudicating authority does not possess the power to alter or rewrite the terms and conditions of the policy. The terms presented to the Complainant, including the extension clause specifying a cap of Rs. 60,000/- for hernia-related medical expenses, were deemed to have been acknowledged by the Complainant upon acceptance of the policy.

The State Commission held that the District Commission failed to consider the specific terms and conditions outlined in the policy. Therefore, it held that the Insurance Company appropriately adhered to the policy's terms and conditions by reimbursing the Complainant up to the specified limit of Rs. 1,20,000/-. Consequently, the appeal was allowed, and the order of the District Commission was set aside.

Case Title: ICICI Lombard General Insurance Co. Ltd. vs Ameet V. Mehta

Case Number: First Appeal No. A/19/12

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