Bengaluru consumer court directs ₹4 lakh payout to senior citizen in health insurance claim dispute

A Bengaluru consumer court has ordered Tata AIG to pay ₹4 lakh to a senior lawyer after rejecting his health insurance claim. The court cited service deficiency and unfair trade practices, also awarding ₹10,000 for mental agony.

Bengaluru: A 65-year-old lawyer who fought a legal battle against Tata AIG Insurance Company after it rejected his health insurance claim has been awarded over ₹4 lakh in compensation. The Bengaluru consumer court delivered this significant verdict in favour of the complainant, Kiran S. Jawali.

Jawali had purchased Tata AIG's Medicare policy in February 2022. He stated that the company’s agent assured him that no pre-medical check-up was required for the policy, which is designed specifically for senior citizens. He paid a premium of ₹84,510, and the policy came into effect on February 14, 2022.

Surgery leads to denied claim and legal action

Within three months of policy activation, Jawali began experiencing severe pain and difficulty urinating. He was subsequently diagnosed with prostate enlargement and hypertension for the first time and underwent surgery at Manipal Hospital in May 2022. However, when he applied for cashless treatment, the insurance company rejected the claim, citing non-disclosure of pre-existing conditions.

As a result, he had to pay ₹4 lakh out of pocket for the hospital expenses. After the company refused to reimburse the claim, Jawali filed a complaint with the city's Second Additional District Consumer Disputes Redressal Commission on May 31, 2024. He accused the insurer of service deficiency and misrepresentation of the policy’s terms by its agent.

Insurer claims non-disclosure, but court disagrees

Tata AIG argued that Jawali had been suffering from these health issues for four years and failed to disclose them at the time of purchasing the policy. The insurer maintained that the onus of truthful disclosure was on the applicant, and verbal assurances by agents could not bind the company. It also pointed out that a pre-policy medical check-up should have been conducted due to the applicant's age.

However, the commission found merit in Jawali’s claims. It noted that the applicant had no prior knowledge of the medical conditions and held Tata AIG responsible for not conducting the mandatory medical examination before issuing the policy to a senior citizen.

Consumer court rules in favour of the complainant

The consumer court concluded that Tata AIG was deficient in service and had engaged in unfair trade practices. It directed the insurance company to pay ₹4 lakh in compensation with 6% interest from the date of notice. Additionally, the commission ordered Tata AIG to pay ₹10,000 towards mental agony and litigation costs.

The court further warned that failure to comply with the order within 45 days would result in an additional interest of 8% per annum on the compensation amount.