You can now register claim complaints of Rs 50 lakh with insurance ombudsman

A policyholder in India can now register complaints that are related to compensation claims of up to Rs 50 lakh with insurance ombudsman offices in India. Earlier, the maximum compensation that ombudsman offices could award to policyholders was capped at Rs 30 lakh. 

On November 10, 2023,  the finance ministry amended the insurance ombudsman rules to increase the maximum compensation amount to Rs 50 lakh.

Due to rising medical inflation, many policyholders today buy term insurance, health insurance, critical insurance and personal accident policies with sums assured of over Rs 1 crore. A study conducted by insurance broking and online aggregation firm Policybazaar.com, the most preferred cover amount for high-networth policyholders was Rs 1.75 crore in the financial year 2022-23.

"This enhancement in the compensation cap marks a momentous stride in catering to the evolving needs of policyholders, especially those investing in high-value insurance covers such as term insurance, health insurance, critical insurance, and personal accident policies. With a surge in individuals opting for coverage amounts exceeding Rs 1 crore, this amendment addresses the growing demands for comprehensive protection in an increasingly aware and financially prudent society," said Shilpa Arora, co-founder of Insurance Samadhan, an insurance grievance redressal platform.

The Office of Insurance Ombudsman is an alternate grievance redressal platform. It aims to resolve grievances of aggrieved policyholders against insurance companies and their intermediaries or insurance brokers speedily and cost-effectively. The offices of the Insurance Ombudsman are under the administrative control of the Council for Insurance Ombudsman (CIO).

If you are not satisfied with the response given by your insurer, you can either directly register your grievance on the Insurance Regulatory and Development Authority of India’s (IRDAI) online portal, known as the ‘Bima Bharosa System’ or you can lodge a complaint to the Insurance Ombudsman within one year from the date of rejection by the insurance company. Alternatively, you can file a complaint with the consumer Court.

"Prior to reaching out to insurance ombudsman offices, write to the insurer and wait for at least 30 days. In case the insurance company fails to respond, reach out to ombudsman offices" said ClearTax in a note.

 

Point to note: The insurance ombudsman disposed of over 92 per cent of the complaints it received from the insured during 2022-23. It received 55,946 complaints during the year across its offices in the country, of which 51,625 were disposed of.

Why are health claims rejected in the first place?

Incomplete waiting period
Data collected by  Policybazaar between April 2023 and September 2023, showed that more than 18 per cent of claims get rejected because of an incomplete waiting period, which means the claim was filed before the waiting period was over. Understanding this rejection category is vital for policyholders, as it points to a lack of awareness.

Claims outside coverage: At a considerable 25% of the rejection volume, this category includes both claims filed for ailments not covered (16%) as well as OPD or daycare claims that were not payable (9%). This emphasises the necessity for policyholders to understand the scope of their coverage. 

Wrongly filed claims: 4.5% of claims are rejected for being wrongly filed. This highlights the need for better customer guidance in the claims submission process, said Policybazaar in a note.

Exhausted limits (2.12%): Limit exhaustion appears in a relatively small fraction of rejections

Rejection due to other lags -

•Not disclosing pre-existing conditions: A significant proportion of 25% claims got rejected due to undisclosed pre-existing diseases like Diabetes or Hypertension. This lack of transparency defeats the purpose of purchasing health insurance in the first place. 

•Query reverts lost: Over 16% of rejections occur due to unsubmitted query reverts when insurers need more information from the consumer's end to process the claim further.

•Unjustified hospitalisation: A relatively lower 4.86% of claims are rejected for unjustified hospitalisation. This includes cases where hospitalisation didn’t meet the required criteria as per the policy. 

How to file a complaint with the Insurance Ombudsman

1. The complaint shall be in writing duly signed by the policyholder or claimant/ legal heirs/ assignee/ or through electronic mail or online through the online platform developed by the Council of Insurance Ombudsmen through their website www.cioins.co.in. 
2. The complainant can send his complaint letter along with photocopies of the supporting documents as given hereunder to the Office of Insurance Ombudsman either through post or through email.
3. Policy copy ( all pages of policy under which complaint is lodged)
4. Copies of all old policies for covering of Insurance since last 48 months prior to this policy if claim is rejected on grounds of pre-existing diseases/waiting period.
5. Repudiation/Denial letter/Partial settlement letter issued by the Insurer.
6. Representation letter sent to the Insurer/Insurance Broker.
7. Any other correspondence exchanged with Insurer/Insurance Broker & TPA.
8. The complainant can also register his complaint online on our website www.cioins.co.in under heading “Register” - Lodge/Track Complaint Online. He can upload the above documents as also proof of identification, photograph on the online registration platform. Please refer FAQ under the heading Lodge/Track Complaint Online for more details.