Flimsy excuses can’t bury genuine claim

Pushpa Girimaji

During a vacation, my wife accidentally slipped on a banana peel and suffered serious fractures. Because of the severe pain, she had to be hospitalised there itself and the doctors prescribed surgery. I immediately contacted the health insurance company and informed them of it and sought clearance for cashless payment. They, however, did not respond even after a day. As my wife was in great pain, we could not wait and paid for the treatment ourselves. Subsequently, when we made the claim, the insurance company rejected it on a flimsy ground that my wife was suffering from migraine and this information was not made known to the insurance company at the time of filling the form. In fact, they accused us of concealing the information and thereby violating the policy condition!

It is true that my wife gets headaches occasionally, but who doesn’t? We never thought of it as something serious enough to deserve a mention in the proposal form. In fact, even the insurance agent said it was inconsequential and need not be mentioned. This whole issue came about because my wife had a severe headache a couple of days after the surgery and she told the doctor that she did get headaches occasionally. In any case, I fail to understand the connection between her headache and our claim. We have had this policy for the last eight years and have never made a claim. What should I do now?

Please lodge a complaint with the insurance ombudsman with all the relevant details. It is true that a policy of insurance is a contract of utmost faith and both parties to the contract have to disclose all material information and failure to do so or concealing any important information pertaining to the health of the insured can render the contract void. But the focus here is on ‘material’ information. So the question is whether the occasional headache was important or relevant enough to be mentioned. Obviously, no one fills the form with a list of toothache or headache or leg ache that one got at some time or the other in the policy because that is not material to the contract. And you have been paying for the policy for eight years without any claim. Even a pre-existing disease is covered after 48 months! So the insurance company cannot come up with such flimsy excuses to deny a genuine claim.

Can you quote a similar case decided by the ombudsman?

If you go to www.gbic.co.in, you can find the decisions of the insurance ombudsmen on disputes pertaining to both life insurance and non-life insurance cases, including individual mediclaims. I will quote an award of the ombudsman from the list (Kamlesh N Patel V/S Iffco-Tokio Genl. Insurance Co. Ltd. Complaint No: AHD-G-023-1617-1511; Policy No: 52646045; Date of Award: 12/04/2017). In this case, the complainant’s wife consulted a hospital for knee pain on August 4, 2016 and was admitted to the hospital for treatment of osteoarthritis of right knee joint and incurred an expenditure of Rs 2,06,474. However, her claim was repudiated by the insurance company on grounds of ‘non-disclosure of material fact’. Here, the complainant and his family were insured with New India Assurance Company since 2000 and had ported to Iffco-Tokio General Insurance in July 2015. The insurance company’s argument was that the complainant’s wife was suffering from hypertension for 10 years and this information was disclosed in the consultation paper of the doctor. However, this was not mentioned in the form filled by the insured when they changed the insurance company. This constituted ‘breach of trust’ and rendered the insurance contract void.

The complainant agreed that his wife was suffering from BP for 10 years, but there was no nexus between BP and knee replacement. After considering all facts, the ombudsman pointed out that first of all, there was no nexus between BP and knee replacement, for which the claim was made. Second of all, the insured had all the accrued benefits under the policy for 15 years, beginning 2000-2001 when she first took the policy. So the complainant was entitled for relief. Taking all facts and circumstances into consideration, the insurer should pay Rs 2,06,474 to the complainant, the ombudsman said.

Before I end, I would advise all those who take insurance policies never to conceal any ‘material information’ relevant to the policy and answer all queries in the form truthfully. Failure to do so will render the contract void. Of course, this is also applicable to insurers and their agents, who have to disclose all terms and conditions, including exclusion clauses to the person purchasing the policy.