Mohali: Insurer fined for ‘wrongful’ rejection of ₹45k health claim

Mohali: Insurer Fined for ‘Wrongful’ Rejection of ₹45,000 Health Claim

Mohali – A recent ruling by the District Consumer Disputes Redressal Commission has mandated ICICI Lombard General Insurance Company to compensate a Mohali resident for medical expenses denied under a health insurance policy. The commission found that the insurer’s rejection of the claim was unjustified, as the treatment for Hepatitis-A was not linked to alcohol consumption as claimed.

Complainant’s Medical Journey

Manjot Singh, a Phase 9 resident of Mohali, had opted for a health insurance plan with a coverage of ₹10 lakh, valid from July 24, 2021, to July 23, 2022. In June 2022, he experienced severe abdominal pain and sought treatment at Government Medical College and Hospital, Sector 16, Chandigarh. Subsequent diagnosis at PGIMER confirmed Hepatitis-A, leading to treatment costs totaling around ₹45,000.

Insurer’s Rejection Basis

Despite the treatment, the insurer rejected Singh’s claim on July 12, 2022, asserting that the disease was caused by alcohol intake. It cited a policy exclusion related to alcoholism treatment. During the hearing, the insurer contended that medical records indicated Singh had been advised to avoid alcohol, supplements, and gym proteins, placing his condition under the exclusion clause.

“The medical records clearly show that Singh was treated for Hepatitis-A, not for alcoholism or substance abuse,” stated the commission.

Commission’s Verdict

The panel, chaired by SK Aggarwal and including Lt Col Jasbir Singh Bath, dismissed the insurer’s argument. It emphasized that advising a patient to cut back on alcohol does not equate to proving the illness stemmed from alcoholism. The decision labeled the rejection as arbitrary and not aligned with the policy terms. The insurer was ordered to refund ₹45,000, along with 6% annual interest from July 12, 2022, and ₹15,000 as compensation for mental distress and litigation costs.

Failure to comply within 30 days would result in additional interest at 9% per annum until the amount is fully settled. The ruling underscores the importance of evidence-based claim decisions in health insurance cases.