The Ernakulam District Consumer Disputes Redressal Commission has ruled in favor of an individual whose insurance claim was initially denied due to a lack of documentation. Star Health and Allied Insurance Co Ltd has been instructed to pay Rs 1.2 lakh to K R Prasad, a resident of Muvattupuzha, who had purchased the ‘Covid Rakshak’ policy from the company in 2020, with an assured sum of Rs 1 lakh. The policy entitled him to a lump sum benefit equal to 100% of the insured amount if he contracted Covid and required hospitalization for a minimum of 72 hours.
Prasad contracted Covid and was hospitalized in Muvattupuzha from January 17 to January 21, 2021, incurring treatment expenses of Rs 2,35,273. However, his claim for reimbursement was denied on April 13, 2021, citing his failure to provide consultation papers, investigation reports, and treatment details related to his pre-existing condition of bronchial asthma. After the Insurance Ombudsman rejected his application, Prasad took the matter to the commission, seeking Rs 1 lakh with interest from the date of the claim’s submission until its settlement, along with Rs 10,000 as compensation for emotional distress and financial difficulties caused by the unfair denial of his claim, in addition to legal costs.
The insurance company contended that Prasad had concealed pre-existing medical conditions such as bronchial asthma and hypertension, and alleged that he was unwilling to submit the required documents for the claim, leading to the application’s rejection. Prasad argued that he couldn’t provide treatment records for bronchial asthma as he had never received prior treatment for the ailment. The commission found fault with the insurance company’s actions, deeming them inadequate since the ‘Covid Rakshak’ policy was explicitly designed to cover Covid-19. The commission observed that the complainant had met the policy’s conditions by being hospitalized for more than 72 hours due to Covid, and the insurance company’s insistence on obtaining medical records unrelated to the claim was unjustified and constituted unfair trade practice and a deficiency in service.
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