Hyderabad: Consumer panel orders Star Health to pay Rs ₹2.26 lakh for wrongful claim rejection
The Commission made it clear that once a policy is granted without prior health screening, the insurer must bear the risk
By Sistla Dakshina Murthy
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Hyderabad: The State Consumer Disputes Redressal Commission has held that an insurance company cannot reject a medical claim on the grounds of pre-existing illness if it had issued the policy without conducting medical tests.
The Commission made it clear that once a policy is granted without prior health screening, the insurer must bear the risk.
Insurer must prove pre-existing disease
The Commission observed that merely alleging that the insured had a pre-existing chronic illness before taking the policy is not sufficient.
The burden of proof lies with the insurance company to establish such claims with valid medical evidence.
Case background
In 2019, G. Manmohan, a senior citizen, purchased a health insurance policy from Star Health Insurance Company and regularly paid a premium of Rs 26,550.
After three years, he was hospitalised due to a urinary tract infection and incurred medical expenses amounting to Rs 2.26 lakh.
However, the insurance company rejected the claim, contending that he had pre-existing ailments prior to taking the policy and had failed to disclose them.
Aggrieved by the rejection, Manmohan and his legal heirs approached the District Consumer Commission, which directed the insurer to settle the medical expenses. Challenging this order, the insurance company filed an appeal before the State Consumer Commission.
Commission upholds District Order
A Bench comprising Justice G. Radharani (President) and Member R.S. Rajeshwari heard the appeal and recently delivered its verdict, dismissing the insurer’s plea.
The Commission directed Star Health Insurance Company to pay Rs 2,26,329 towards medical expenses with 9% annual interest. Additionally, it ordered the company to pay Rs 10,000 as compensation and Rs 5,000 towards litigation costs.
The ruling reiterates that insurance companies cannot evade liability after issuing policies without due medical examination and must honour genuine claims.
