Pvt health insurance firm penalised for rejecting claim

Dharwad: The District Consumer Grievances Redressal Commission has come down heavily on a private health insurance firm for rejecting the claims of a father and son. The Commission has imposed a penalty of Rs one lakh besides ordering reimbursement of the medical fees with 10% interest.
Ashith Charantimath and his son Prateek of Mangalwarpeth in Dharwad, had paid premiums of Rs 42,122 and Rs 9,758 respectively to the insurance company and obtained health insurance coverage valid from Oct 6, 2023 to Oct 5, 2024.
On May 1, 2024 Asheet and earlier on Feb 18, 2023 Prateek suffered from health issues and received treatment at Amruth Nursing Home in Dharwad.
The cost of treatment was Rs 18,504 and Rs 18,441, respectively. After being discharged from the hospital, the complainants submitted their insurance claims to the insurance company along with documents. However, the claims were rejected by the insurance company on the grounds that hospitalisation was not necessary. Considering this an act of service deficiency under the Consumer Protection Act, the aggrieved policy holders filed a complaint before the Dharwad District Consumer Commission.
After thoroughly examining the case, Commission chairman Ishappa Bhute and member Vishalakshi Bolashetti observed that the complainants underwent treatment as in-patients based on a doctor's advice, and documents confirmed their admission at Amruth Nursing Home."The policies provided by the insurance company were valid during this period. Therefore, covering the medical expenses was the primary responsibility of the insurance company. Its failure to do so amounted to a breach of duty and was deemed a deficiency in service under the Consumer Protection Act", the Commission stated and ordered Star Health Insurance to reimburse the treatment costs of Rs 18,504 and Rs 18,441 respectively with 10% interest calculated from the date of claim rejection. Additionally, the company was directed to pay Rs 50,000 each to the complainants as compensation for the mental agony and inconvenience caused, along with Rs 10,000 each towards litigation expenses. These directions were issued to both the Hubballi and Chennai branches of Star Health Insurance.