Blog Details

Introduction

In a recent consumer protection case, a Chandigarh resident successfully challenged the denial of his medical insurance claim by Star Health and Allied Insurance. The claim was initially rejected on the basis that his illness was caused by alcohol consumption. However, the consumer disputes commission found fault with the insurer’s decision and awarded the claimant Rs 4 lakh along with compensation. This blog explains the case details, the insurer’s argument, and the consumer panel’s ruling in an easy-to-understand manner.

Background of the Case

Inderjit Singh, a resident of Chandigarh, had purchased health insurance from Star Health and Allied Insurance since 2014. His premiums were regularly deducted from his salary. In January 2020, Singh experienced severe stomach pain and sought medical help. He was diagnosed with gallstones requiring surgery and treatment for acute necrotizing pancreatitis (ANP), a serious inflammation of the pancreas that causes tissue death. His condition was further complicated by acute kidney injury and acute lung injury.

Medical Treatment and Claim Rejection

Singh received treatment from a well-known hospital, PGIMER in Chandigarh, and was discharged after about two months. The total medical expenses amounted to approximately Rs 4.6 lakh. After submitting his health insurance claim to Star Health and Allied Insurance, he was shocked to learn that the claim was denied. The insurer stated that Singh’s pancreatitis was caused by alcohol consumption, which was excluded from coverage according to the insurance policy’s terms.

Insurer’s Standpoint: Alcohol Use Exclusion

The insurance company defended its rejection by citing a common clause found in many health policies. According to this clause, expenses related to diseases caused by alcohol consumption are not covered. The insurer argued that acute necrotizing pancreatitis can be caused by two major reasons—gallstones or excessive alcohol intake. Since the discharge summary mentioned alcohol as a possible cause, the insurer held that Singh’s illness was related to alcohol use and refused to pay the claim.

Consumer Panel’s Observations

The District Consumer Disputes Redressal Commission examined the case carefully. It noted that while gallstones and alcohol are typical causes of pancreatitis, the medical documents did not conclusively prove that Singh’s illness was due to alcohol. Importantly, there was no solid evidence on record showing “excessive alcohol use.” The commission highlighted that pancreatitis could result from multiple factors, and alcohol consumption was not the sole reason in this case.

Judgment and Relief Ordered

Based on the facts, the commission found that the insurance company had misinterpreted the policy terms by denying a legitimate claim. It ruled in favor of Inderjit Singh, directing Star Health and Allied Insurance to pay Rs 4 lakh towards his treatment costs. Additionally, the insurer was ordered to pay Rs 10,000 as compensation and Rs 10,000 for the cost of litigation to Singh. The consumer panel clearly showed that insurance companies cannot unfairly reject claims without concrete proof.

What This Means for Policyholders

This case highlights an important lesson for health insurance policyholders. Insurance companies often reject claims related to conditions associated with alcohol use. However, it is crucial that such rejections are based on clear and convincing evidence, not mere assumptions. If policyholders believe their legitimate claims have been wrongly denied, they should not hesitate to approach consumer forums for justice.

Final Thoughts

The consumer panel’s decision to penalize Star Health and Allied Insurance for wrongly denying Inderjit Singh’s claim is a positive step towards protecting policyholders’ rights. It reminds insurers to act fairly and transparently, and it empowers individuals to stand up against unjust claim rejections. If you face a similar issue, it’s important to gather all medical records and consult legal experts or consumer protection bodies to safeguard your interests.

This case serves as encouragement for insured individuals to be vigilant about their policy terms and persistent in securing the benefits they deserve.

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