Repudiation Based On Inconclusive Diagnosis, Chandigarh District Commission Holds HDFC Ergo Health Insurance Liable

Brief Facts:

Mr. Vinod Kumar (“Complainant”) was approached by Naresh Kumar, an intermediary of the HDFC Ergo Health Insurance Ltd. (“Insurance Company”), urging him to acquire the Health Individual Standard Insurance Policy. Acting on this recommendation, the Complainant purchased the "Easy Health Individual Standard Insurance Policy", which was subsequently renewed yearly until March 2, 2021. On September 1, 2020, the Complainant experienced health issues, leading to hospitalization at Healing Hospital with a diagnosed Upper GI bleed chronic liver disease. Despite presenting a cashless card at the time of discharge, the insurance company denied the cashless benefit, resulting in the Complainant settling a bill of ₹ 2,51,136/-. The Complainant filed a claim with the insurance company, which was later repudiated because the Complainant was admitted with alcoholic liver disease. The Complainant denied this and made several communications with the insurance company but didn't receive a satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against the insurance company.

In response to the consumer complaint, the insurance company argued that the claim denial was based on the Complainant's admission with a diagnosis of "alcoholic liver disease" and alcohol withdrawal which fell under the exclusion clause 9(C)(IV) of the subject policy, which excluded coverage for treatments arising from the abuse or consequence of the abuse of intoxicants. Furthermore, the insurance company alleged that the Complainant violated the policy terms by concealing his pre-existing alcoholic liver disease during the policy purchase. Therefore, it prayed for the dismissal of the complaint.

Observations by the District Commission:

The District Commission noted that the discharge summary did not explicitly state alcoholic liver disease as the diagnosis. The treating doctor's notes included mentions of various medical conditions, with specific emphasis on alcohol withdrawal rather than a conclusive diagnosis of alcoholic liver disease. The District Commission held that this contrasted with the insurance company's repudiation letter, where it claimed that the Complainant was diagnosed with alcoholic liver disease. Therefore, the District Commission held the insurance company liable for deficiency of services for repudiation of a genuine claim.

Consequently, the District Commission directed the insurance company to refund the claim amount of ₹ 2,51,136/- along with 9% per annum interest from the date of repudiation on December 4, 2020. Furthermore, recognizing the mental agony and harassment caused to the Complainant. Further, the insurance company was directed to pay ₹ 20,000/- as compensation for the mental agony and harassment caused to the Complainant. It was also directed to pay ₹10,000/- for the litigation costs incurred by him.

Case Title: Vinod Kumar vs HDFC Ergo Health Insurance Ltd.

Case Number: CC/455/2022

Advocate for the Complainant: Pavinder Singh Bedi

Advocate for the Respondent: Nitesh Singh