Insurance Companies Wilfully Neglect Reimbursing The Insured, Who Then Have To Pay The Courts To Get Their Rights Enforced: Madras High Court

The Madras High Court recently remarked that often Insurance companies wilfully refuse reimbursements to the insured, forcing them to pay the court to get their rights enforced. The court added that individuals usually do not have the legal knowledge to understand the ambiguous language used in the policy documents which helps the company's intention to waive their liability. “In fact, in many cases, the individual has no legal knowledge about the ambiguous language used in the company's policy with an intention to waive them from the liability to pay the injured on happening of an agreed event. Many a times the companies willfully neglect reimbursing the insured, who instead of getting their amount from the company have to pay the Courts for getting their rights enforced,” the court observed. Justice GK Ilanthiraiyan thus came to the rescue of a woman challenging an order of the authorized officer, ICICI Lombard General Insurance rejecting the insurance claim with respect to her Husband, who died of cardiac arrest during the second wave of COVID-19. The petitioner's husband had insured his life to the tune of Rs. 71 Lakh. Since the petitioner's husband died during the Covid-19 wave, no postmortem was conducted on the body. Subsequently, when the petitioner made a claim, it was repudiated on the ground that no investigation was done and no postmortem was conducted. The insurance company also claimed that there was no major medical illness. The insurance company challenged the maintainability of the plea and submitted that the petitioner ought to have approached the Insurance Ombudsman. It was also submitted that as per the policy condition, a cardiac arrest would not come under the coverage of the policy and thus the claim was rightly repudiated. The court noted that as per the policy, the first occurrence of a heart attack of specified severity was covered under the policy. The court also noted that as per the orders of the Apex Court, an insurance company could not be too technical and reject a claim on technical grounds. Thus, the court noted that the order of the insurance company could not be sustained and quashed the same. The court directed the insurance company to allow the petitioner's claim within a period of four weeks. Counsel for Petitioner: Mr.K.Suresh Babu For Mr.N.Vijayaraj Counsel for Respondent: Mr.M.B.Raghavan M/s.M.B.Gopalan Associates, Mr.B.Sivakallapan Citation: 2024 LiveLaw (Mad) 214 Case Title: N Lakshmi v IRDAI and Others Case No: W.P.No.26233 of 2022Click here to read/download the judgment

Insurance Companies Wilfully Neglect Reimbursing The Insured, Who Then Have To Pay The Courts To Get Their Rights Enforced: Madras High Court

Upasana Sajeev

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