Here is a Guide on How to Handle a Health Insurance Claim Rejection

Most of us buy a health insurance policy to come in handy in case of hospitalization, as the policy would pay our expenses. We buy a health insurance policy thinking that we should not use it, but it might happen that we should sometimes use it. This is the moment of truth that you had been waiting for many days after the policy purchase. Even after paying the premiums regularly, the insurance company has rejected your claim.

If you experience such a situation, you may need clarification about how to handle it—the confusion multiplies when a cashless claim is rejected, forcing you to arrange the funds immediately. If you face such situations, you must know all the options that are available to you to get your rightful amount from the insurance company.

We discuss a step-by-step process for getting your health insurance claim amount from the insurance company once they have rejected it. It is advisable to follow the steps mentioned below. Still, you are not compelled to follow them in the order below, as you may choose to appeal directly to the highest authority depending on your situation.

Here are the Steps to Handle a Health Insurance Claim Rejection

Step 1:Read & Understand Claim Rejection Letter

After facing a health insurance claim rejection, the first step is to read the claim rejection letter clearly and understand the reasons behind the rejection. Insurance companies would provide details regarding the reasons for rejection; in some cases, the reason may sound vague. When you understand the reason for rejection, you should take positive measures so that the claim gets settled when you raise a request again.

For example, the rejection could be a failure to submit the relevant and required documents within the given timeframe. In such cases, you should submit the required documents immediately and raise the claim again to settle it. However, when the rejection letter states that the claim was rejected due to a wrong declaration in the proposal form regarding pre-existing diseases or any other conditions, you should verify whether you intentionally hid material facts from the insurance company when taking the policy.

Once you feel that the claim was rejected due to no mistake of yours, you may follow the next step in the process by raising the claim again or appealing to the insurance company’s appellate authority.

Step 2: Raise the Claim Again/Appeal

After understanding the reason for the claim, you may choose to raise it again by submitting all the required documents or appealing against the rejection with the insurance company’s appellate authority. The protocol for raising a claim or making an appeal against the insurance company will be mentioned in the policy copy provided by the insurance company.

Policyholders may choose to raise the claim again or appeal the claim in two cases- one is when the claim is rejected altogether, and the other is when the claim amount awarded is less than the expenses incurred by you, subject to the maximum sum insured under the policy. It is advisable to approach the appellate authority of the insurance company before escalating it to the ombudsman or IRDAI.

The claim may be approved or increased if the appellate authority finds the case meritorious. However, if you receive the same rejection answer from the appellate authority, you may choose to proceed to the next step.

Step 3: Escalate to IRDAI

Once you are done chasing the internal forums, the next thing left is to approach the external forum. One of the first external forums to approach is the Insurance regulatory and development authority of India’s “Bima Bharosa,” an Integrated Grievance management system. Once a complaint is lodged in IRDA’s portal, it will be redirected to the insurance company’s portal for further action. This way, IRDA would be able to track the status of the complaint without any hassle and take action if the complaint is not addressed within the stipulated time period.

The IRDA grievance management system would also be a great way to approach your insurance company if they need to respond to you properly. But even after directing your complaint through the IRDA’s Bima Bharosa and not receiving a favorable reply, you may choose to follow the next step in the process.

Step 4: Insurance Ombudsman/Consumer Court

The next step in the grievance redressal process is approaching the insurance ombudsman or the consumer court. It is not mandatory that the aggrieved policyholder first go to an insurance ombudsman and then to the consumer court, as you may decide to approach the court directly. However, it would be beneficial to approach the insurance ombudsman, as it acts as more of a mediation process whose final result is a recommendation and not a final ruling of a policyholder’s claim. 

If you have not received the desired justice even after approaching the Ombudsman, you may choose to take up legal recourse. You may choose to approach a consumer court or a civil court, but going to a consumer court may give the policyholder an advantage over the civil court.

The consumer court is also authorized to listen to any consumer complaint per the consumer’s definition. Moreover, approaching a consumer court with your complaint is less costly and light on the pocket. There are 3 levels of consumer courts in general- District, State, and National.

FAQs: