Claim rejection is one of the most difficult things to handle, particularly when it is a cashless health insurance claim involving you or your family members who are in the hospital and are forced to adjust the amount for hospitalization in a very short period of time. Every policyholder takes an insurance policy expecting it to come in handy in case of any mishappenings.
If the insurance company rejects your claim and you feel it is contestable, follow the appellate process specified in the policy document. The appellate process consists of an internal appeal and an external appeal. If unsatisfied with the internal appeal process, you should go to an external appeal, such as a consumer or civil court.
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Navigating Insurance Claims: Key Factors for Policyholders Before Court Action
The Policy Should be Live/Active
The first and foremost thing to verify is whether the policy was active at the time of the claim. If the policy is not active at the time of occurrence of the event, then it would not be covered under the policy. But, in certain cases where the event occurred during the policy period but the claim was reported after the expiry of the policy period, the claim should be settled. For this reason, it is important to ensure that the policy is active at the time of occurrence of the event.
There would often be a break in the policy period, and an event would occur during this period, ultimately leading to the insurance company’s decline. For example, a lorry owner without a valid Third-party policy has caused an accident resulting in the death of a passenger on the road. The lorry driver then took a third-party policy immediately, but the policy date would start 24 hours after the policy issuance date. In such cases, the insurance company would reject the lorry driver’s claim as the policy was not live at the time of the accident.
Supporting Documents Should be Shared
The next thing to consider is sharing all the relevant documents both before and after lodging the claim. All the documents shared during the internal appellate process should also be shared when a case is filed in the consumer or civil court. If any of the relevant and required documents were not shared before but are now shared in the court, the court would direct the insurance company to settle the claim if the relevant document is the one that was missing for claim settlement.
All the supporting documents should be anticipated and shared with the court in a single session so that the case is not adjourned to another date.
Avoid Misrepresentation of Facts
The most important thing to remember is that misrepresenting material facts or intentionally hiding material facts would lead to rejection of the claim anywhere. If you try to hide the facts from the court, they will come out during the hearing, and the judgment may not be in your favor, as misrepresentation is an exclusion under an insurance policy.
Insurance is a contract between the insurance company and the insured customer. Both parties are expected to share correct information based on good faith; any deviation could lead to a penalty. If the insured customer does not disclose any of the material facts in good faith, it may result in claim rejection, whereas if the insurance company has not disclosed complete information to the insured customer, it would be penalized by asking to settle the claim.
Go Through the Appeal Process
The other important thing to do before approaching a court is to go through the appellate process. The first stage is to raise the claim again after submitting the required documents or appealing to the insurance company again. The second stage is to raise a complaint through the Bima Bharosa portal of IRDA. The third step is to approach an insurance ombudsman, and then the final step is to approach a consumer court or civil court. Consumer court online filing is also available in certain cases.
Once the case is filed in a consumer court, you may check the court case status with the case number allotted to you. The first three stages can be classified as internal appeal, and the last stage as external appeal.
Refer to Similar Cases
Whenever you plan to file a case in a consumer court, it is important to check the Supreme Court judgment on insurance claims similar to yours. This will give you an idea of the possible judgment that could be obtained in your case.
FAQs:
What is an insurance ombudsman?
The Insurance Ombudsman is an entity created by the Government of India to examine policyholder complaints and settle them outside the courts in a cost-effective, impartial, and efficient manner.
Which one is better, a civil court or a criminal court?
From a consumer point of view, a consumer court is better than a civil court as the time taken to dispose of a case is less formal in terms of procedures, timelines, etc.
Which is the less costly option- civil court or criminal court?
The less costly option for a consumer to resolve a consumer complaint. Moreover, going to a consumer court gives the policyholder an edge.
Which court disposes of the claims faster- civil or criminal court?
A consumer court disposes of the claims faster than a civil court.
Who will be held responsible if the agents mis-sell the policy?
If an agent missells an insurance policy to the consumer, the insurance company is responsible for making good the loss suffered by the policyholder. If the case approaches a consumer court, the ruling may be in favor of the insured.
