The Punjab State Consumer Disputes Redressal Commission has ordered Star Health and Allied Insurance Company to pay Rs 3 lakh to Neelam Saini, a resident of Gurdaspur district, for denying her a health claim for pregnancy-related expenses. The company had rejected her claim citing an exclusion clause in the policy that stated it was not liable to make any payment for childbirth, including complicated deliveries and caesarean sections. However, the commission ruled that the company’s rejection of the claim was unjustified and amounted to business malpractice.
Neelam had given birth to twins via caesarean section at a hospital in Ludhiana and had incurred an expenditure of Rs 4.8 lakh. She had made a claim of Rs 3 lakh as per the insurance terms, but the company had rejected it. The commission upheld the earlier order of the District Consumer Disputes Redressal Commission, which had ordered the company to pay the claim amount with 18% interest, as well as Rs 50,000 as compensation for mental harassment and Rs 20,000 as litigation charges.
The commission noted that the policy document given to Neelam did not mention the grounds for exclusion of the claim, and that the company had not proven that the exclusion clause had been explained to her. The commission also stated that excluding deliveries and caesarean sections from insurance claims was unreasonable, given that most deliveries today take place through caesarean sections. The order read that this exclusion “amounts to business malpractice”.
The commission’s decision is a significant victory for consumers, as it highlights the need for insurance companies to be transparent and fair in their dealings with policyholders. The ruling also underscores the importance of ensuring that policyholders are aware of the terms and conditions of their policies, including any exclusion clauses. By ordering the company to pay the claim amount and compensation, the commission has sent a strong message that insurance companies must prioritize the interests of their policyholders and not engage in business malpractices.