Insurance firm told to pay Rs 1.07L for repudiating claim

Ajay Joshi

Tribune News Service

Jalandhar, January 23

The District Consumer Forum has directed the HDFC Ergo General Insurance Company and HDFC Bank to pay Rs1,07,000 to a city-based resident for repudiating the claim of the insurance policy.

In a complaint filed by Naveen Kumar (20), he alleged that the insurance firm denied the claim of his father Mangat Rai Paul, who died on October 21, 2018. He was reportedly working as a Head Constable.

Before his death, Mangat Rai had reportedly taken a personal loan from the bank and against the same loan itself, he was insured by the bank under the Master Policy No 2999201366179901, of which the HDFC Bank Limited was the master policy holder.

Subsequently, the deceased was insured by the firm after being fully satisfied and premium to that effect as consideration had also been charged by the bsank.

Meanwhile, Paul was kept under medical treatment due to his ailment. Subsequently, he suffered critical illness and he died of heart attack and the policy itself covered critical illness for the sum assured of Rs1 lakh. The deceased even remained hospitalised and was medically treated at Shriman Super Specialty Hospital at Pathankot Road, Jalandhar. Even for the treatment itself, an expenditure of Rs91,000 was incurred, as he remained on ventilator during his treatment.

Apart from coverage for critical illness, the insurance firm had also covered Paul under ‘Credit Shield Insurance’ for sum insured of Rs5 lakh, for which a premium of Rs1,400 was paid. The complainant said his father was regularly paying installments towards loan and on the date of the death, an amount of Rs3,73,775 was outstanding. Thus on account of unfortunate death, as per insurance policy, the complainant and his family were entitled to receive an amount of Rs1 lakh on account of critical illness and further for waiver of Rs3,73,775 on account of credit shield insurance.

Denying the claim, the complainant was provided only with the cover note and no actual detail of the insurance policy was further provided thus violating the Insurance Regulatory and Development Authority (IRDA) guidelines.

The complainant said the insurance firm was guilty of unfair trade practice and deficiency in service and it should be directed to remit an amount of Rs1,00,000 on account of critical illness and to provide waiver of outstanding loan amount of Rs3,73,775 to pay damages for mental tension, agony and harassment to the tune of Rs50,000 with interest.

The officials of the insurance firm appeared through its counsel and filed a joint reply, contesting the complaint by taking preliminary objections that the complainant has alleged that policy terms and conditions were not provided by them.

“It is pertinent to mention here that the policy was issued to the insured person and only he could raise objection to it,” the officials of the firm claimed.

After considering the overall facts and circumstances, the counsel of the court comprising its president Kuljit Singh and member Jyotsna, came to the conclusion that the complainant was entitled for the relief as the deceased was covered under ‘credit shield insurance’ as well as ‘critical illness’ as per the policy. The complaint filed under the Consumer Protection Act was partly accepted and insurance firm was directed to pay an amount of Rs1,00,000 on account of critical illness and a waiver of outstanding amount of Rs3,73,775 to remit the installment of Rs12,881 and it was also directed to pay compensation as well as litigation expenses to the complainant to the tune of Rs7,000 for causing mental tension and harassment.

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