Policy holders must challenge repudiated claims within a strict time-limit
No one reads an insurance policy nor is it possible to do so considering that it runs into numerous pages, and tends to be printed in mainly illegible fine print. But the fact remains that every person who takes out an insurance policy is bound by the terms and conditions in it, having agreed to abide by them when he signs the proposal form.
This often leads to litigation, but consumers should know that there is a legally-binding time limit on when they can file cases against rejected insurance claims.
When a claim is rejected, the policy-holder often ma-kes several representations to the insurance company requesting a reconsideration of its decision. This is followed by reminders, which also tend to be ignored. As a result, the policy-holder files either a civil suit or a consumer complaint before the consumer court.
When this happens, the insurance company invariably pleads that the complaint filed by the policy-holder is time-barred. Under the terms and conditions of the insurance policy, the rejection of the claim by the insurance company can be challenged within the period specified in the policy. This is generally three months from the date of repudiation, and any action taken after that date is not sustainable. Is such a plea, which is taken by insurance companies in almost every case, tenable under law?
This question came up for adjudication before the National Consumer Disputes Redressal Commission, New Delhi
