THIRUVANANTHAPURAM: The state Consumer Disputes Redressal Commission (CDRC) has come to the rescue of a man who was denied the benefit of a health insurance policy. The commission observed that the insurance company conspicuously changed the wording of the ‘exclusion clause’ in the policy document to deny the benefit to the insured.
The order issued by commission president Justice K Surendra Mohan and member Radhakrishnan K R assumes significance since the insured’s complaint was earlier rejected by the Insurance Ombudsman.
The insured, a Kochi native, had taken a Family Medicare Policy from United India Insurance Company Ltd for a sum insured of Rs 2.5 lakh for the period from March 19, 2015, to March 18, 2016. The policy was renewed for another year starting March 19, 2015. During the period of the second policy, the complainant was hospitalised for treating Vesical Calculus. The insurance company denied cashless treatment or reimbursement of treatment expense worth Rs 1.2 lakh citing that Vesical Calculus was among the diseases not covered during the first two years of the policy as per the exclusion clause.
The insured’s complaint was rejected by the Insurance Ombudsman following which he approached the Ernakulam district CDRC. The district commission ordered in favour of the insured, directing the company to pay the claim amount with 18 per cent interest per annum. The state commission’s recent order came on an appeal petition filed by the company.
The state commission approved the insured’s argument that the company replaced the wording in the exclusion clause in the policy document to deny the benefit. The exclusion clause in the policy document handed to the insured was: “Unless the insured has 24 months of continuous coverage, the expenses on treatment of diseases such as [a list of diseases including Calculus] are not payable”. The company’s repudiation letter stated the exclusion clause as: “During the first two years of the policy, the expenses on treatment of diseases such as [a list of diseases including Calculus] are not payable.”
The state commission’s order said that the change in wording at the beginning of the exclusion clause was conspicuous. It approved the insured’s argument that “elapse of 24 months” was not stated in the clause and that the original condition was for “24 months of continuous coverage”. On renewing the policy, the insured has insurance coverage for 12 months, making the total period of coverage 24 months from the date of inception, March 19, 2015.
“It is surprising that the official who issued the repudiation letter was not aware of the actual clause attached to the policy issued to the insured three months ago. Such a casual approach adversely affects the rightful claims of policyholders,” the order said. The state commission, however, observed that the interest rate awarded by the district commission, 18 per cent, was on the higher side and reduced it to 9 per cent.