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Insurance is meant to provide financial security when things go wrong. However many insureds learn that just because they have a policy that appears to be valid and active, it does not mean that when they make a claim it will be honoured for the amount expected.
Claims can be delayed. Insurers can request documents multiple times. A surveyor’s report can vary significantly from the insured’s own interpretation of loss. Health claims can be challenged on medical issues; motor, property or business claims can be disputed on the basis of exclusions, depreciation, non-disclosure, causation or conditions of the policy.
Such circumstances result in insurance claims disputes. These disputes often take on extra significance when the insured or insured family is already vulnerable through hospitalisation, an accident, property loss or business disruption, or facing financial uncertainty because of a significant loss.
Policyholders in Delhi NCR (and India) can find it is often not a question of whether they have a claim. Disputes can arise over what is actually covered by the policy, whether the insurer’s interpretation of the policy is fair or permissible, whether submitted documents are deemed adequate, and whether the refusal or reduction has been clearly explained.
BK Singh Advocate has come across many legal situations where insureds have made a claim which they expected to be paid, but then found themselves in dispute with the insurer. This can be even more concerning when a large sum of money is at stake, and the policyholder is uncertain if their problem is contractual, consumer-related, under regulated or involves interpretation of the loss.
A useful first step is to understand what an insurance claim dispute is. Simply: it is a conflict between the insurer and insured over the right to, or amount of, an insurance claim; how it is assessed, processed or interpreted; or the payment (or lack of) of a claim. The specific legal position will depend very much on the wording of the policy and the facts.
If you are a consumer looking for information on insurance claim disputes, the reasons are unlikely to be academic. An insured loss affecting your family’s budget. A health claim that you were told was rejected. A property claim reduced by a large amount, leaving you as a business owner facing a financial shortfall.
BK Singh Advocate looks at these problems by understanding the nature of the dispute, the policy wording, the claim history and the relevant legal position rather than believing that each rejected insurance claim is the same problem.
Insurance claim disputes are significant because when the money is delayed, it usually comes at a time of extreme need. A household could be paying medical bills to the hospital. The owner of a car could be relying on that car to drive to work. A business could be awaiting reimbursement after fire, burglary, flood or any other insured peril.
Delhi insurance claims disputes NCR markets also have a diverse group of retail policyholders, white-collar workers, businesses, real estate owners and corporate enterprises. As such, claims disputes can relate to medical insurance, car insurance, life insurance, homeowner insurance, commercial insurance and more.
Lawyers note that legal challenges can arise over the language of the policy itself from the onset. One party may have a strong belief in the insured peril, while the opposition may have a strong exclusion, condition, limitation or method to value the loss.
BK Singh Advocate explains there’s one other issue he often comes across. “Policyholders tend to read the final denial letter and not investigate the full claim file.” Emails, applications, surveys, medical documents, pictures, invoices and policy endorsements can all become important to reviewing what occurred.
Insurance Regulatory and Development Authority of India is the governing body for insurance practices. IRDAI has a framework for policyholder protection and dispute resolution. The Insurance Ombudsman rules are also sometimes involved. The current rules from IRDAI can be viewed here: 2024 Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers Regulations.
Quick Facts About Insurance Claim Disputes
Insurance claim disputes occur when the policy holder and insurer disagree about an insurance claim or aspect of its processing. The dispute may involve disagreement about whether the claim is payable, how much of the claim is payable, why payment was late, whether an exclusion applies or if the policy language was misinterpreted.
For instance, an insured might think that a hospitalization is covered by his health insurance while the insurer may view a specific affliction as excluded under the policy. An insured motorist may expect his car to be repaired or for settlement to be made for a particular amount while the insurer values the loss differently.
An insured business may file a claim for property damage caused by an insured peril while the insurer may dispute whether that loss was caused by that peril. BK Singh Advocate finds that exact policy wording important as insurance contracts are usually riddled with definitions, exclusions, warranties, conditions and limitations that can change the nature of a claim dispute drastically. Sometimes the issue is not total denial. A settlement that only covers part of a loss can be disputed if the policy holder does not think the insurance company's evaluation is accurate.
Multiple legal frameworks can potentially apply to an insurance dispute in India.
The Insurance Act, 1938, IRDAI’s regulations, relevant policyholder protection regulations that may apply, the terms of the relevant insurance contract and, if applicable, the Consumer Protection Act, 2019, could all apply depending on the circumstances of the dispute. Under the Consumer Protection Act, 2019 (CPA), “deficiency” in service is defined and the statute broadly governs consumer disputes. Whether a given insurance dispute falls under the consumer jurisdiction will depend on the facts and the law.
IRDAI has a parallel grievance-redressal scheme through the insurance company’s own grievance redressal process and the Bima Bharosa mechanism. IRDAI says that the policyholder is expected to first contact the concerned insurance company to resolve grievances. The Insurance Ombudsman is a separate mechanism. IRDAI says complaints can include delayed claims settlements, partial or total refusal, disagreements about coverage terms regarding claims, and certain servicing complaints subject to the relevant limits and jurisdictional requirements.
Advocate BK Singh dives into these differences as the specific nature of an insurance issue cannot be understood simply by labeling it as a “rejected claim.” The issue could be related to contractual interpretation, service deficiency, loss evaluation, delay, documentation or something entirely different.
A total repudiation can be devastating to a policyholder because the insurer can rely on either an exclusion, breach of policy condition, non-disclosure, misrepresentation or some other ground based on the contract.
Often the argument hinges on the specific language in the policy and the facts as alleged by the insurer.
The insured might get an amount and yet disagree on the computation. There can be disagreements on issues of depreciation, allowable expenses, estimating of damages, sum insured, deductions, exclusions or any other terms of the contract.
BK Singh Advocate has noticed that many cases of disagreement on partial settlement is where the issue is not about the happening of an event but valuation of the financial loss.
Delay can itself become another source of financial and emotional stress. Health claims, accidents claims, property losses and business related claims can be stressful when the insured is waiting for a decision and bills keep coming.
The IRDAI's policyholder-protection framework includes requirements related to claim servicing and settlement. Provisions applicable will vary by line of insurance.
Insurance policies do not automatically insure against all losses. Clauses which exclude coverage can be crucial to the dispute.
Trouble occurs when the insured feels the exclusion is ambiguous, inapplicable or unfair in the circumstances and the insurer wants to enforce it to limit liability.
In many general insurance claims the quantification of loss can become a significant bone of contention. The insured may consider that the actual physical or financial loss is far in excess of the assessed amount. The loss assessment therefore forms part of the evidential matrix of the dispute, rather than an administrative afterthought.
Insurance claims can involve extensive records. Missing invoices, incomplete medical records, inconsistent dates, unclear ownership documents, incomplete repair estimates or gaps in correspondence may create factual disagreements.
The problem becomes more serious where the insurer treats a documentary deficiency as relevant to claim entitlement.
Documentary trail depends on the type of insurance but can generally consist of the following:
BK Singh Advocate reviews Documentary trail. As claims dispute can have a different appearance if you look at the whole trail rather than just the last email sent by the insurer.
When a claim first arises may become relevant where the insurer has denied or partially denied your claim, disputed liability or quantum, upheld a position on an exclusion, delayed or otherwise manufactured a dispute over a contractual entitlement.
A further red flag is where there is a significant disparity between what the policy holder believes they are covered for and how the insurer has documented that cover.
The consequences for businesses can be more severe than this however, as an insurance dispute can impact upon working capital, stock in trade, plant and machinery, commercial property or business interruption issues.
When a family is affected, there could be disputes over medical costs, death claims, car damages or loss of home contents.
BK Singh Advocate can help identify whether you have such a problem by reviewing the circumstances against the policy wording, claim correspondence and any surrounding documentation. Each case would need to be assessed on its own merits.
Insurance policies do not automatically insure against all losses. Clauses which exclude coverage can be crucial to the dispute.
Trouble occurs when the insured feels the exclusion is ambiguous, inapplicable or unfair in the circumstances and the insurer wants to enforce it to limit liability.
Claim rejection, partial settlement, delay, exclusions, policy interpretation, loss assessment and documents/disclosures are common areas of dispute.
An insurer can reject a claim if it is based on a contractual or otherwise legally recognised ground.
Whether that ground actually applies to the specific set of facts is a separate legal issue.
Claim repudiation typically refers to the outright rejection of an insurance claim by the insurer.
However, the relevance of the repudiation depends on the reasons given and the terms/circumstances of the insurance policy.
Yes. The partial settlement is disputable if the policyholder does not agree with the assessment amount or the insurer's deductions and restrictions.
Only certain types of insurance service-related disputes would qualify as a claim under the Consumer Protection Act, 2019, depending on the statutory criteria and facts of the individual case.
The Insurance Ombudsman is an alternate grievance-redressal route for certain insurance complaints, provided eligibility, jurisdiction and other criteria are met.
IRDAI mentions delay in claims and partial/total repudiation as some of the known categories.
No. The category of policyholder/complaint, financial limits and other conditions determine if your complaint is suited for the Insurance Ombudsman.
As of this writing, IRDAI mentions certain prerequisites for filing a complaint with the Ombudsman.
The policy determines the coverage, contract exclusions, conditions and limitations. Terms of the policy can greatly influence the legal nature of the dispute.
Delays can become a grievance of its own, especially if the regulatory body specifies time frames for processing/responding to claims.
This depends on the type of insurance product and the facts of the case.
Forms, policy documents, correspondence, assessment reports, invoices and any records can help establish what was claimed, what evidence was provided and the insurer's final stance.
Insurance claim disputes involve a nuanced disagreement that often exists between the language of the policy, the facts, applicable regulatory framework and the insurers’ handling of the claim.
For insureds in Delhi NCR / India, it often becomes difficult to ascertain what the dispute is about – coverage? Exclusion? Delay? Valuation? Documentation? Repudiation? Amount offered?
BK Singh Advocate looks to the legal nature of the dispute as well as the material facts of record.
BK Singh Advocate can assist you with your insurance claim disputes with insurers throughout Delhi NCR and India. Visit us online or call to learn more, and remember we evaluate each situation on its facts and applicable law.
Speak directly with Advocate BK Singh at LEGAL365.
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