The Central District Consumer Disputes Redressal Forum said the insurance company "wrongly read" the exclusion clause in its policy, issued to Delhi resident Pankaj Jain, to mean that for the claim to be honoured the insurance cover has to be continuous for four years.
"It (insurance company) repudiated the claim on the ground that the complainant (Jain) and his parents did not have claim free continuous policy for four years. The company has wrongly read the exclusion clause. It (the clause) only says that during the first two years of the operation of the policy the expenses of replacement of the knees will not be payable.
"Jain was having mediclaim policy from the National Insurance Company, for his parents for a continuous period for more that two years. Consequently, the claim could not have been repudiated by taking shelter under the exclusion clause of the policy," the bench presided by B B Chaudhary said.
The forum's order came on the complaint of Jain who had alleged that the insurance company had denied reimbursement of the medical expenses incurred on his mother's treatment on the ground that he needed to have continuous four years of claim free policy.
He had argued the policy conditions meant that claim was not payable only during the first two years of the cover adding that in this particular case the cover was continuous for three years as he had earlier bought an individual mediclaim and later two parivar mediclaims in favour of his parents from the insurance company.
The forum agreed with Jain's contention and observed that the insurance company "committed negligence" by denying his claim and directed it to pay him the insured amount of Rs 2.5 lakh along with Rs 20,000 as compensation for mental pain and Rs 5,000 as litigation cost.
The insurance company was proceeded against ex-parte as none appeared for it before the forum.