Legal options Upon Insurance Claim being Rejected?
The well-known legal aphorism “Ubi Jus Ibi Remedium” states that “where there is a right, there is a remedy.” The legislature or an administrative authority guarantees that any damages incurred during the activity will be compensated.
Who is eligible to make a claim under the Insurance Scheme?
A policyholder, their legal heirs, or anybody else authorised by a court of law can file an insurance claim. It is important to note that reimbursement for a third party can only be awarded through the policyholder, not directly. No compensation in place of an accident or mishap may be used to recover a loan or a mortgage, and if it is discovered that a third party is doing so, the person who is claiming the policy has the right to sue.
According to the Contract Act, all terms and conditions must be read before signing any contract. This practise of recognising all relevant terms and conditions before beginning with any contract is necessary so that the day of the policyholder’s claim is not unexpected.
Obligations are the requirements that must be met by the policyholder prior to filing an insurance claim under the policy. The following are only a couple of them:
Intimation or Report must be made to the insurer as soon as feasible after the accident or in the manner specified under that insurance scheme. It is recommended that any claim be accompanied by a written report or a formal application.
Rights of the policyholders
A person who files a claim has contractually bound rights. By include guidelines on Claims Management for the Insurance Business under Section 3A of the Insurance Act, the IRA has made these rights more explicit. The guidelines, which were published in the Gregorian calendar month of 2012, are aimed at ensuring that insurance resolve claims quickly and truthfully.
To be informed on the methods, formalities, and time frames for settling claims as outlined in the insurer’s claims management manual.
To be given an approved claim form and a list of particular documents that will be required when filing a claim, as well as any other information needed to process the claim; If a claim is allowable, the underwriter will settle it quickly; if more investigation is required to determine whether or not the claim is collectible, the underwriter will notify the applicant, and if a service provider is hired to investigate the claim, the applicant should be made aware of the action being taken.
Reasons for Insurance Claim Rejection
You buy insurance to ensure that you and your family will not face financial difficulty as a result of hospitalisation, extended medical treatment, or a tragic death. What if your claim is denied by the insurer? Everything is up for grabs. You expected the insurer to help you and your family, but they politely denied to pay anything.
Insufficient comprehension of the terms and conditions
For example, if a policy provides a 30,000/- cap for cataract treatment and the policyholder began their treatment at a very expensive optic hospital, the claim may be denied due to a lack of awareness of the terms and circumstances. Technical terminology in the insurance that policyholders may find difficult to comprehend. This rationale, however, is unjustified. If the policyholder knowingly suppressed critical facts at the time of purchase, he or she will not be able to claim due to a mistake at the time of claim
Remedies provided by Law under Rejected claims under Insurance policies
It has been seen in the majority of cases that claim rejection occurs despite due attention or utmost care .Contact the Insurance Regulatory and Development Authority (IRDA).
Under any given policy, an approach to Insurance Ombudsmen under Rule 12 of the Redress of Public Grievances 1998 Approach to Alternative Dispute Resolution (ADR)
A Consumer Forum or a Court of Law Approach.