Insurance firm told to pay Rs 3 lakh to woman for denying claim

The Punjab State Consumer Disputes Redressal Commission has ordered Star Health and Allied Insurance Company to pay Rs 3 lakh along with costs to a woman for denying her a health claim, saying that the company was not liable to make any payment for pregnancy-related cases.

The order reads that “as of today, most deliveries are taking place through caesarean sections, so excluding deliveries and caesarean sections (from the insurance claims) amounts to a business malpractice”.

Neelam Saini, a resident of Pakho Chak village in Gurdaspur district, had delivered twins in Dr Rama Sofat Hospital, Ludhiana, on June 11, 2022. Following complications in the caesarean procedure, she was referred to Dayanand Medical College and Hospital in the city.

She remained in the hospital till July 17 and incurred an expenditure Rs 4.8 lakh. A claim of Rs 3 lakh was made as per the insurance terms, which was rejected by the company on ‘vague grounds’.

State commission president Justice Daya Chaudhary and members Simarjot Kaur and Vishav Kant Garg upheld the earlier order of the District Consumer Disputes Redressal Commission (Gurdaspur), which also underlined the fact that the amount was payable with 18 per cent interest from the date of the complaint till the date of actual payment. The company had been asked to pay Rs 50,000 as compensation for mental harassment and Rs 20,000 more as litigation charges.

The company argued that, “Exclusion clause (number 18) of the insurance specifically states that the company shall not be liable to make any payment in respect of medical expenses incurred, traceable to childbirth (including complicated deliveries and caesarean sections incurred during hospitalisation) except ectopic pregnancy.”

The commission said that in absence of evidence regarding terms and conditions being part of the policy document and the complainant having been explained about the same, rejection of the claim by the opposite parties was totally unjustified.