Health Insurance Claim Wrongly Denied; Insurer Ordered To Pay Rs 96,000 Compensation

Kochi: The Ernakulam District Consumer Disputes Redressal Commission has ordered Aditya Birla Health Insurance Company to compensate a consumer after it unlawfully denied a legitimate accident treatment claim.

The commission ruled that the insurer’s decision to reject Movattupuzha resident Joy Paulose’s claim on the grounds of “non-disclosure of pre-existing illness” was unjustified. The bench, comprising DB Binu (President), V Ramachandran, and TN Sreevidya (both members) found that linking accident-related medical expenses to an unrelated prior health condition violated both the spirit of the insurance contract and consumer protection law.

“Courts and Commissions have consistently held that where hospitalisation is for accidental injuries, repudiation on the ground of non-disclosure of unrelated pre-existing ailments is untenable, absent proof of causal nexus. The failure to file a written version within the timeline under Section 38(2) CPA 2019—read with New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd., (2020) 5 SCC 757—also justifies proceeding on the unrebutted record. In these circumstances, the repudiation is arbitrary and amounts to a deficiency in service under Section 2(11). The conduct also borders on unfair trade practice (Section 2(47)), as a blanket reliance on exclusions to deny an otherwise valid accident claim is unfair and deceptive.,” the order stated.

The court directed the insurance company to pay Rs 81,042 — the insured claim amount — with 12% annual interest, along with Rs 30,000 as compensation and ₹5,000 towards legal expenses within 45 days. Adv. Tom Joseph represented the complainant.