In a significant ruling that underscores the importance of a fair assessment of insurance claims, the Surat Consumer Disputes Redressal Commission (CDRC) has directed an insurance company to honour a medical claim it had rejected because the patient briefly went home to bathe during his hospital stay.
Court Slams Insurer's 'Suspicious' Tag, Cites Deficiency in Service
The commission ordered The New India Assurance Co Ltd to pay the claim amount of Rs 67,115 along with 8% annual interest from March 27, 2023. Additionally, the insurer must pay Rs 3,000 as compensation for the mental harassment caused to the policyholder, Paresh Malani.
The case revolved around a mediclaim policy held by Malani, a 35-year-old man, which provided a cover of Rs 2 lakh for a year starting January 4, 2022. During the policy period, Malani fell ill and was admitted to a multi-speciality hospital in Surat's Bhatar area on October 9, 2022. After receiving treatment, he was discharged on October 13, 2022, settling a hospital bill of Rs 67,115 for which he sought reimbursement.
The Ground for Rejection: A Brief Departure for Bath
The insurance company, after appointing an investigator, rejected the claim. The investigator's report highlighted that Malani had admitted to leaving the hospital on the evening of October 12 to have a bath at his home before returning immediately. Leveraging this admission, the insurer termed the claim "suspicious" and denied it, citing a violation of the standard 24-hour continuous hospitalization clause often present in policy terms.
Challenging this decision, Malani approached the consumer commission seeking justice and reimbursement of his legitimate medical expenses.
Consumer Court's Rationale and Final Order
The Surat CDRC bench carefully examined the evidence, including the medical papers and the insurer's reasoning. In its observation, the court noted a critical lack of evidence to support the company's stance.
"The complainant went out of the hospital to have a bath just once, after which the insurance company found the claim to be suspicious and rejected it. However, the medical papers produced are found to be perfect and not forged," the commission stated. It further reasoned, "If the complainant is telling the truth that he went home for a bath, that does not mean the claim is fabricated and fake. There is no evidence to prove the claim to be fake. This is clearly a deficiency in service by rejecting the claim."
Thus, finding the rejection unjustified and an act of service deficiency, the consumer court ruled in favour of Paresh Malani. The final directive mandates the insurance company to pay the principal claim amount with interest and the compensation for harassment, providing much-needed relief to the policyholder.
Key Takeaways for Policyholders
This ruling highlights several important points for insurance consumers across India:
- Insurance companies must base claim rejections on concrete evidence of fraud or policy violation, not merely on procedural technicalities.
- The consumer redressal forums are a potent avenue for policyholders to challenge arbitrary claim settlements.
- Minor deviations from hospital stay protocols, when medically documented treatment is genuine, may not be sufficient grounds for claim denial.
The judgment reinforces the principle that insurance is a contract of good faith, and claim assessments must be reasonable, not merely technical.
