Insurer Told To Pay Up After Claim Rejection Sparks Consumer Dispute

A mediclaim dispute in Dharwad has ended with a dressing-down for United India Insurance Company, which has been asked to reimburse treatment costs and pay compensation to its customer after a district consumer forum held that the insurer had turned down a claim without any convincing reason, and, according to a recent report by the Times of India, the rejection leaned more on suspicion than evidence.

Patil, a resident of Malamaddi in Dharwad, was covered under a mediclaim plan of Rs 3,00,000. In early October last year, he slipped and badly hurt his right arm. What he thought was a sprain turned out to be a fracture that required surgery, so he was taken to a private multispeciality hospital in the city. The doctors operated and kept him under observation for a few days before letting him go home. After the discharge formalities, Patil collected the stack of bills and treatment papers and raised a reimbursement claim with his insurer, a routine step for anyone with health cover.

The insurer’s reply surprised him. The claim was refused on the footing that he was allegedly an alcoholic and therefore not entitled to coverage. No laboratory report, no hospital note, and no doctor’s observation was attached to support that assertion. Patil said he had never been treated for alcoholism and, baffled by the rejection, moved the Dharwad District Consumer Disputes Redressal Commission, alleging deficiency in service and unfair treatment.

Forum Examines Papers, Questions, Grounds

When the matter came up before the Dharwad consumer forum, the paperwork told a very different story from what the insurer suggested. The hospital files recorded a straightforward fracture, a surgery, and a short stay. None of the doctors’ notes or diagnostic sheets mentioned alcohol use, dependence, or anything remotely close. If there had been a history, it would typically show up in pre-operative assessments or anaesthesia remarks, but neither did.

United India Insurance, for its part, could not point to a single lab reading or previous admission record to back its claim. The forum seemed unimpressed with the insurer’s defence and remarked that a mediclaim policy cannot be denied based on a hunch or hearsay. The allegation, the forum noted, was serious enough that it ought to have been supported by something more substantial than a bare assertion.

The eventual order reflected that view. The panel asked the insurer to settle Patil’s medical bills, calculated at Rs 1,38,943, and to pay interest at 10 percent from the date the claim was lodged. On top of the reimbursement, the forum added Rs 50,000 for mental distress and Rs 10,000 to cover the cost of the complaint. For Patil, it meant closure on a dispute that had begun with a simple fracture and snowballed into a legal fight he hadn’t expected to wage.

What The Case Signals

Industry observers say such rulings are becoming less of an outlier. Forums have begun to probe the reasoning behind claim denials rather than taking them at face value. In health insurance, where bills, discharge summaries, and diagnostics usually speak for themselves, it is difficult for an insurer to justify a refusal without papers to match.

For customers, the message is simple: a rejected claim can be challenged and sometimes overturned. For insurers, the case underscores that clean paperwork and clear communication are not just good practice but increasingly necessary if they want people to trust the product they are selling.