CERS compels New India Assurance Co. to pay deducted sum

Ahmedabad, 4 February 2014

Consumer Education Research Society (CERS) won a case at the State Commission some months ago against New India Assurance Company Ltd. This case again brings to light how insurance companies deny rightful claims by giving unsubstantial reasons for rejection.

In this particular case, Asha Rungta’s claim was partially sanctioned. CERS intervened and got a ruling in favour of the complainant. The State Commission ordered New India Assurance Company Ltd. to pay Asha Rs. 1,75,395 and Rs. 1250 towards litigation costs.

As per the case details, Asha was insured under Good Health Policy for the period effective from 1 March 2006 along with other family members. The sum assured was Rs. 4 lakh. Asha was hospitalised in Sterling Hospital for the treatment of lung disease for over a month. Medical expenses came to Rs. 3,75,395 and accordingly a claim was submitted.

The insurance company sanctioned only Rs. 2 lakh on the grounds that Asha had been suffering from this disease since 2003 and at that time the sum assured was Rs. 2 lakh only. Hence, she was not entitled to the remaining claim amount.

After repeated pleas to settle the claim went unheard, CERS filed the complaint on her behalf before the District Forum, Ahmedabad. As the insurance company did not produce any documents to support their deduction and the policy was first issued to the complainant in 2000, the Forum passed a verdict in her favour.

Aggrieved, the insurance company approached the State Commission. After hearing arguments of both sides, the Commission observed that the insurance company had not produced any proof of pre-existing disease, such as a doctor’s affidavit, and upheld the order passed by the Forum.

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