A consumer court in Mohali has directed HDFC ERGO Health Insurance to pay over Rs 2 lakh to a policyholder after it denied his hospitalisation claim, citing a pre-existing heart condition, without offering any real proof.
The District Consumer Disputes Redressal Commission also ordered the insurer to compensate the complainant with Rs 30,000 for mental harassment and legal expenses. The judgment pointed to a “deficiency in service” and said the insurer had failed to justify the claim rejection.
What was the case?
Kuldeep Singh Sandhu, a resident of Kharar, had bought a group mediclaim policy through Canara Bank. The policy, issued in his wife’s name, offered Rs 5 lakh coverage for both of them and was valid from late November 2019 to the same time the following year.
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Sandhu was admitted to an eye hospital in March 2020 in Sohana after experiencing severe symptoms like vomiting, slurred speech, facial numbness, and difficulty with balance. During the treatment, the hospital reached out to the insurer for cashless approval. But within three days, the insurer declined the request, citing pre-existing ‘Coronary Artery Disease (CAD)’.
The insured, however, had never been formally diagnosed with this condition before.
The next day, the policy was abruptly terminated.
Sandhu responded with medical records and a certificate from a cardiologist who confirmed he had no symptoms or history of CAD. Another doctor clarified that the blood thinner Sandhu had been taking since 2008 was purely preventive, not prescribed for any confirmed heart disease.
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None of this was enough for the insurer. Sandhu ended up paying Rs 1,01,953 for that hospitalisation. Later that month, he was admitted again for similar symptoms and paid another Rs 99,053, over Rs 2 lakh out of pocket in total.
When the policyholder took legal recourse and reached out to a consumer court, the commission came down hard on the insurer, noting that it failed to provide any medical records to support its claim that the condition was pre-existing.
“Companies welcome customers with all promises at the time of selling the policy but don’t stand by them when a genuine claim comes,” the commission remarked in its order.
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It has directed HDFC ERGO to refund the full medical expenses with 6 per cent annual interest from the date of discharge (March 23, 2020), giving them 30 days to comply. If the payment isn’t made on time, the interest rate will jump to 9 per cent.
A Quick Note: What Exactly Counts as a Pre-Existing Disease?
In health insurance, a pre-existing disease (commonly called PED) is a medical condition that existed before you bought your policy. It could be something you were diagnosed with, treated for, or even just had symptoms of.
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The issue is that insurers sometimes try to stretch the definition. For instance, if someone was on preventive medication or had a vague symptom years ago, some insurers might try to flag it as a PED, especially when a big claim is filed, and this is where many disputes start.
However, according to insurance guidelines, it is not enough for an insurer to “suspect” a PED, they have to prove it clearly, with medical evidence. Courts have repeatedly pointed this out, and this latest ruling adds to that line of accountability.
