Chandigarh: Insurance companies suffer consequences and fined for rejecting accident victims’ claims

A health insurance company is in hot water after it denied an accident victim’s medical claim because she failed to disclose a pre-existing condition.

The Chandigarh District Consumer Disputes Redressal Commission has directed Niva Bupa Health Insurance Company to pay the full medical expenses of the complainant in view of the fact that the complainant’s pre-existing ailments were not relevant to the treatment of the injuries sustained in the accident. $1,33,946 along with interest at 9% per annum from the date of rejection of the claim.

The complainant, Salil Talwar, a resident of Sector 18-B, Chandigarh, submitted that he purchased a health insurance policy from Max Bupa Health Insurance Company Ltd (now Niva Bupa Health Insurance Company Ltd), New Delhi, with a premium of $16,496.

On June 8, 2019, he encountered a car accident at Mumbai railway station. After receiving mild treatment in Mumbai, he was admitted to Max Hospital Mohali for treatment and discharged on June 13, 2019.

However, claims for cashless treatment were rejected by insurance companies. Thereafter, the insurance company issued a notice of cancellation of the policy to the complainant for failure to disclose his pre-existing medical conditions – epilepsy, hepatitis and lipoma resection.

Sahil claims he responded, but the company rescinded the policy.As a result, he had to pay $1,33,946 for hospitalization expenses out of pocket.

In response to his complaint, the insurance company told the committee that hepatitis in 1999, three seizures, the last in 2008, and a lipoma removal in 2005 were not disclosed during the investigation.

The complainant never disclosed this before purchasing the policy, which was a serious breach of the terms and conditions. Accordingly, the cashless request was rejected and the complainant was served with a notice of cancellation of the policy.

However, the Committee noted that the complainant’s illnesses as early as 1999, 2008 and 2005 were not related to the treatment he received at Mohali Max Hospital in 2019.

“It is clear that the insurance company was unable to connect his previous illness/condition with his current illness/condition for which he was being treated at the treating hospital. Therefore, to argue that the company was justified in dismissing the complainant’s claim and that the current consumer complaint should prevail is Unsafe.” The Commission held that the insurance company was directed to settle the complainant’s hospital bills and pay the costs $Compensation of NT$10,000 for causing mental anguish and harassment, plus $10,000 as litigation costs.