The insurer is obligated to mention the reason in the claim repudiation letter. If the reason is established fraud, then proof has to be provided by the insurer
Recent regulations implemented by the Insurance Regulatory and Development Authority of India (Irdai) stipulate that an insurer cannot deny a claim after a five-year moratorium period if the policyholder unintentionally fails to disclose pre-existing conditions.
Also, according to publicly available data, the insurance industry boasts a high claim payment rate, typically between 90 per cent and 95 per cent.
“However, it remains essential for policyholders to provide accurate information when filing a claim,” says Bhaskar Nerurkar, head- health administration team, Bajaj Allianz General Insurance.
Under certain circumstances, a claim can be denied.
When A Claim Can Be Denied
Claims may be denied under certain circumstances.
Fraud: If the insurer can demonstrate that the policyholder committed fraud or misrepresented information during the policy purchase or claim process.
Exclusions: Claims for conditions or treatments explicitly excluded from the policy coverage.
Lapse In Policy: If there is a gap in policy renewal and a claim is filed during this lapse period.
Inaccurate Information: Providing incorrect or incomplete information when submitting a claim.
“Make sure the diagnoses and symptoms on your claim form align with the medical records submitted. Any mismatch in information may lead to claim rejection. When filing for reimbursement, submit all required documents and the claim form within the specified timeline. Review the exclusions in your policy; treatments for alcoholism, drug or substance abuse, and its consequences are not covered. Additionally, intentional self-injury is also not covered under the policy,” says Nerukar.
What To Do If A Claim Is Denied
The policyholder can ask the insurer why the claim was rejected. The insurer is obligated to mention the reason in the claim repudiation letter. If the reason is established fraud, the insurer must provide proof.
“If the rejection is not an account of established fraud or if proof of fraud is not supplied, and the insurer does not review his position or does not respond to the insured’s request for such review, then the insured can litigate the matter before the Ombudsman or the consumer court,” says Hari Radhakrishnan, expert, Insurance Brokers Association of India (IBAI).
Also, if you are not satisfied with the claim response of your insurer, you can always port your insurance policy to another insurer.
“Porting can be done by the insured depending on his or her preferences. The insured should carefully evaluate the product alternatives available, pricing, and claim settlement record of the insurer to whom the policy is proposed to be ported,” says Radhakrishnan.
There would be a requirement of fresh disclosure through proposal form which should be correctly done without any suppression or omission of facts.