Rejection Of Insurance Claim: Surat District Commission Holds Star Health Insurance Liable For Unfair Trade Practice

The Commission ruled that the Insurance Company's decision to deny the claim was unjustified. Consequently, the Insurance Company has been ordered to pay Rs. 1,32,862/- along with an interest rate of 9% per annum. Additionally, the Commission awarded Rs. 3,000/- for the mental harassment and inconvenience caused to the complainant, and another Rs. 2,000 to cover the litigation expenses.

Brief Facts:

In February 2021, the complainant sought medical attention at a Surat hospital due to chest pain and was diagnosed with Ischemic Heart Disease (IHD). Following treatment, the complainant was discharged, and the total cost incurred was Rs. 1,90,397/-. However, when the complainant filed a claim with the Insurance Company, the claim was rejected in April 2021.

In response, the complainant lodged a complaint with the District Commission, alleging serious negligence, unfair trade practices, and deficient service by the Insurance Company. The complainant demanded a claim of Rs. 1,90,397/- with interest, compensation for mental agony, and litigation costs.

The Insurance Company contested the complaint and denied all the allegations. It argued that the rejection of the complainant's insurance claim was based on clause 12 of the policy's terms and conditions, which pertained to existing diseases suffered by the complainant.

Observations of the Commission:

The District Commission allowed the complaint considering that there is no dispute that the Insurance Company provided the medical policy to the complainant through a sale. The Commission carefully reviewed the medical papers, policy terms and conditions, and all relevant bills. Based on this examination, it deemed the Insurance Company's cancellation of the claim to be unjustified, thereby validating the complainant's case.

The Commission highlighted that the concept of a pre-existing disease did not apply in this instance, as there was no connection between the complainant's medical condition and CKD (Chronic Kidney Disease) according to the treating doctor's certificate. The certificate provided by the treating doctor was considered valid and could not be invalidated.

Consequently, the Commission concluded that the complainant is entitled to receive Rs. 1,32,862/- along with an interest rate of 9% per annum. Moreover, the complainant is to be compensated with Rs. 3,000/- for the mental harassment and inconvenience caused and an additional Rs. 2,000 to cover the costs incurred during the litigation process.

Case Title: Kishore Chandra Dhanraj Shah vs. Star Health and Allied Insurance Co. Ltd.

Counsel for the Complainant: Bela Girnara, Advocate

Counsel for the Insurance Company: Manilal Solanki, Advocate

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