The Ernakulam District Consumer Disputes Redressal Commission has taken a firm stance, imposing a fine of ₹96,000 on a Mumbai-based insurance company for its wrongful denial of a customer’s health insurance claim.
The ruling was delivered by a panel, including president D.B. Binu and members V. Ramachandran and Sreevidhia T.N., in response to a petition filed by Joy Paulose, a resident of Muvattupuzha, against Aditya Birla Health Insurance Company Ltd.
The incident occurred in February 2024, less than a month after the policy’s activation, when Paulose suffered severe injuries from a 10-foot fall at his home. His medical bills amounted to ₹81,042. Despite this, the insurance provider rejected both his cashless treatment request and the subsequent claim, alleging non-disclosure of pre-existing conditions. Paulose, however, countered that his treatment was exclusively for the injuries sustained from the fall and entirely unrelated to any pre-existing health issues.
Insurance Company Fails to Respond
Crucially, the opposing party (the insurance company) failed to submit a written response within the stipulated legal timeframe.
The commission’s order highlighted that the insurance company had repudiated the claim based on alleged non-disclosure of conditions like varicose veins and dyslipidemia, as referenced in their rejection and reconsideration letters. These communications, the commission noted, overlooked the discharge summary, which made no mention of any pre-existing diseases relevant to the hospital admission and explicitly stated that the hospitalization was due to an accident.
The commission emphasized, “Courts and commissions have consistently maintained that when hospitalization is a direct result of accidental injuries, a claim cannot be rejected on the grounds of unrelated pre-existing ailments, especially in the absence of a causal link. Such repudiation is deemed arbitrary and constitutes a deficiency in service under Section 2(11) of the Consumer Protection Act. Furthermore, relying broadly on exclusions to deny a legitimate accident claim borders on unfair trade practice [Section 2(47)], as it is both unjust and misleading.”
In conclusion, the commission determined that the insurance company exhibited a deficiency in service and engaged in unfair trade practices, causing significant inconvenience, mental distress, hardship, and financial loss to the complainant. Consequently, the company has been ordered to reimburse Paulose’s medical expenses of ₹81,042, pay ₹10,000 as compensation for the mental agony and harassment he endured, and contribute ₹5,000 towards the legal costs incurred during the proceedings.
Advocate Tom Joseph represented the petitioner in this case.