Star Health Liable For Wrongfully Limiting Mediclaim Reimbursement: Belagavi Consumer Commission
The Additional District Consumer Disputes Redressal Commission, Belagavi, comprising Sri M.I. Shigli (President) and Sri Girishagouda S. Patil (Member), has held Star Health and Allied Insurance Company Ltd. guilty of deficiency in service for restricting a mediclaim reimbursement on the basis of a sub-limit clause that it failed to establish as part of the renewed insurance policy.
Facts
The complainants, the widow and daughters of late Devdutt Kopikar, approached the Consumer Commission alleging deficiency in service by Star Health and Allied Insurance Company Ltd. Kopikar was covered under a "Stars Senior Citizen Policy", originally issued in 2019 and subsequently renewed. During the course of renewals, the sum insured was enhanced from ₹3 lakh to ₹5 lakh and the premium was correspondingly increased.
On March 10, 2025, Kopikar was admitted to Venugram Hospital, Belagavi, after suffering a cerebrovascular accident (CVA). Although a cashless claim was sought, the request was deferred and the family incurred the treatment expenses. After discharge, reimbursement was sought for medical expenses amounting to ₹4,28,308. However, the insurer settled only ₹2 lakh and declined the balance claim, prompting the complainants to approach the Commission.
Star Health contended that the policy contained a disease-specific sub-limit applicable to treatment for cerebrovascular accident. According to the insurer, the maximum admissible amount under the relevant policy condition was ₹2 lakh, which had already been paid. It argued that the claim had been settled strictly in accordance with the contractual terms and that no further amount was payable.
Observations
The Commission noted that there was no dispute regarding the hospitalization of the insured or the expenses incurred for treatment. It observed that the insurer's entire defence rested on the alleged sub-limit restricting reimbursement for CVA treatment.
Examining the record, the Commission found that the insurer failed to identify any stipulation in the documents produced before it that clearly restricted liability to ₹2 lakh under the renewed policy. The Commission further observed that the insurer had not demonstrated that the Customer Information Sheet or the alleged restrictive terms had been furnished to the insured.
The Commission also took note of the fact that the policy had been renewed and the sum insured enhanced from ₹3 lakh to ₹5 lakh upon payment of higher premiums. It held that the insurer had failed to explain whether the earlier policy conditions relied upon by it continued to govern the renewed policy. In the absence of proof that the sub-limit formed part of the operative contract, the insurer could not rely upon it to deny reimbursement of the remaining claim amount.
Holding that the restriction of the claim to ₹2 lakh was unreasonable and contrary to the coverage for which premium had been collected, the Commission concluded that the insurer was guilty of deficiency in service.
Decision
Partly allowing the complaint, the Commission directed Star Health to pay the balance claim amount of ₹2,28,308 with 12% interest per annum from March 30, 2025, the date of discharge from hospital, until realization. It further awarded ₹10,000 as compensation for mental agony and inconvenience and ₹5,000 towards litigation expenses. The amounts were directed to be paid within sixty days, failing which the entire amount would carry 6% interest per annum from the date of the order until realization.
Case Title: Prafula W/o Devdutt Kopikar & Ors. v. Star Health and Allied Insurance Company Ltd.
Case No.: Complaint No. 381/2025
Counsel for Complainants: Sri Rohit N. Latur
Counsel for Opposite Party: Sri S.K. Patil, Advocate