In a significant ruling, the District Consumer Disputes Redressal Commission – II, U.T. Chandigarh, held Tata AIG General Insurance Company Limited accountable for wrongful repudiation of a legitimate medical claim. The commission deemed the company’s justification for rejection-pre existing cough and fever invalid and ordered them to settle the claim amount of Rs 3lakh with interest
The case revolved around a policyholder who acquired a Medical Insurance Policy from Tata AIG General Insurance Company Limited, disclosing her asthma condition and paying an additional premium. Subsequently, she was required to be hospitalized for eight days at Max Super Speciality Hospital, Mohali. Although the hospital sought pre-approval for the claim, the insurance company rejected it, citing undisclosed cough symptoms.
After paying the hospital bill herself the woman reached the insurance company to claim reimbursement. However, the insurance company maintained its position and offered weak explanations like the unavailability of cashless facilities. This led her to file a consumer complaint against both the hospital and the insurance company.
During the hearing, the insurance company defended its decision by stating the woman exhibited symptoms like a cough for three months, fever for fifteen days, and shortness of breath before admission. They argued that these symptoms. Her existing asthma, constituted pre-existing conditions, making the claim ineligible for coverage within the initial 48 months of the policy.
SK Sardana and President Amrinder Singh Sidhu of the District Commission, however, rejected this claim, pointing out that conditions like fever, cough, and even diabetes are common in today’s world, can be treated with medicine, and shouldn’t be categorized as pre-existing conditions. They also emphasized how open the woman had been in revealing her asthma up front.
The commission further cited a previous judgment – Delhi State Commission Life Insurance Corporation of India Vs. Sudha Jain (2007) – established that everyday ailments like hypertension, occasional pain, cold, and similar conditions are part of regular life and cannot be grounds for claim rejection unless they necessitate hospitalization or surgery close to policy purchase.
As a result, the District Commission ordered the insurance company to reimburse the claim amount plus interest at the rate of nine percent annually, calling their actions “illegal and unjustified.” However, because the hospital was not present during the proceedings, the allegation against them was dropped.
The decision by the District Consumer Disputes Redressal Commission II, U.T. Chandigarh, is a significant victory for policyholders and a warning to insurance providers to maintain moral claim evaluation procedures. It makes the line between ordinary ailments and pre-existing disorders clear, so people looking for medical insurance coverage would receive fairer treatment.
Consumers are likely to benefit from this ruling. Even legal experts have hailed this decision as a positive step towards consumer protection in the insurance sector. This decision will lead to a more transparent and accountable insurance industry. By establishing clearer guidelines and fostering open communication, insurance companies and consumers can navigate the complexities of medical insurance with greater confidence.
