The Delhi High Court has ruled in favor of a policyholder, Reena Goel, who had filed a petition against United India Insurance Company Limited for not reimbursing her full Covid-19 hospitalization claim. The court observed that a government circular issued during the pandemic, which regulated hospital charges, cannot be used to limit the contractual obligations of insurance companies towards their policyholders. The circular, issued by the Delhi government on June 20, 2020, was intended to regulate the fees hospitals charged patients for Covid-19 treatment, but it did not reduce the reimbursement payable under insurance policies.
The court noted that the Insurance Regulatory and Development Authority of India (IRDAI) had already clarified this position through circulars issued in January and April 2021. Goel had been admitted to a hospital between December 4 and December 18, 2020, and incurred expenses of ₹3,56,295. She was covered under a ₹3 lakh base policy and an additional ₹3 lakh “Super Top Up Medicare Policy.” However, the insurer reimbursed only ₹1,75,340, citing the Delhi government’s circular.
The court found the insurer’s reliance on the circular unjustified and directed United India Insurance to release the balance amount to Goel within four weeks. The court held that the deficit payment was contrary to IRDAI’s clarifications and the past conduct of the insurer in similar cases. The petitioner was represented by a team of advocates, while IRDAI was represented by Abhishek Nanda, Hrishika Rawat, and Sourabh Singh.
The court’s decision is a significant victory for policyholders who have been facing issues with insurance companies citing government circulars to limit their claims. The judgment emphasizes the importance of contractual obligations and the need for insurance companies to honor their commitments to policyholders. The case highlights the need for clarity and transparency in insurance policies and the importance of regulatory bodies like IRDAI in ensuring that insurance companies act in the best interests of their policyholders.