Northwest Delhi District Commission Holds United India Insurance Co Liable For Wrongful Repudiation Of Genuine Medical Claim

Brief Facts:

The Complainant had a mediclaim policy with United India Insurance Co. (“Insurance Company”) since 2009. The policy provided coverage up to Rs. 2 Lakh. The Complainant was admitted to Saroj Hospital due to severe chest pain, where he underwent coronary angioplasty and was later discharged. The total treatment expenses amounted to Rs. 1,97,184/-. Claiming reimbursement under his policy, the Complainant alleged that the Insurance Company reimbursed only Rs. 40,000/- and rejected Rs. 1,57,000/- arbitrarily without valid grounds. Despite repeated requests, the Insurance Company did not reconsider its decision or release the balance amount. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Dispute Redressal Commission-V, Northwest Delhi (“District Commission”) against the Insurance Company.

In response, the Insurance Company argued that the claim fell under clause 1.2 of the policy's terms and conditions, which limited reimbursement for specified major surgeries to 70% of the sum insured (Rs. 2 Lakhs), capped at Rs. 40,000/-. According to the Insurance Company, the Complainant's claim was appropriately settled within these policy limits.

Observations by the District Commission:

The District Commission referred to clause 1.2(d) of the policy and noted that it allowed for reimbursement of up to 70% of the sum insured for cardiac surgeries, such as the coronary angioplasty undergone by the Complainant. It held that out of the total expenses incurred by the Complainant (Rs. 1,97,184/-), a significant portion was left unpaid by the Insurance Company despite acknowledging the applicability of the clause.

The District Commission held that the Insurance Company's partial reimbursement of Rs. 40,000/- out of Rs. 1,97,184/- was unjustified and arbitrary. Therefore, it held the Insurance Company liable for deficiency in services.

Consequently, the Insurance Company was ordered to pay the complainant 70% of the total bill, deducting the Rs. 40,000/- already reimbursed, with interest at the rate of 6% per annum. Further, the Insurance Company was directed to pay a compensation of Rs. 15,000/- to the Complainant.

Case Title: Rajender vs United India Insurance Co. Ltd.

Case Number: CC/885/2013

Date of Pronouncement: June 6^th, 2024