In a win for policyholders, the Ghaziabad District Consumer Disputes Redressal Forum has directed Star Health and Allied Insurance to pay ₹1.1 lakh towards a Covid hospitalization claim that the insurer had earlier denied. The forum also ordered an additional ₹5,000 as litigation costs, citing the mental distress caused to the insured.
| Detail | Information |
|---|---|
| Forum | Ghaziabad District Consumer Disputes Redressal Forum |
| Insurer | Star Health and Allied Insurance Co. Ltd. |
| Claim Amount | ₹1.1 lakh |
| Additional Compensation | ₹5,000 for litigation costs |
| Case Type | Covid-19 Health Insurance Claim Denial |
Background
The case dates back to the Covid-19 pandemic, when the policyholder was admitted to a hospital for treatment and later filed a claim under their Star Health policy. Despite submitting all required documents and medical records, the claim was denied by the insurer, allegedly citing technical grounds and policy exclusions.
Feeling wronged, the policyholder approached the consumer forum, arguing that the denial was unjustified and arbitrary, especially when Covid treatment was covered under the policy guidelines issued during the pandemic.
Forum’s Findings
After reviewing the evidence, the forum found that:
- The hospitalization was genuine and directly related to Covid-19.
- The policy in effect during the treatment clearly covered Covid-related expenses.
- The insurer failed to provide convincing reasons or evidence to justify the denial.
The panel concluded that Star Health’s rejection of the claim amounted to a deficiency in service, warranting full settlement of the claim plus compensation for harassment.
The Verdict
The Ghaziabad consumer forum ordered Star Health to:
- Pay the full claim amount of ₹1.1 lakh.
- Add ₹5,000 towards litigation and mental distress costs.
- Ensure payment within a stipulated period, failing which additional interest would apply.
Why This Matters for Policyholders
This case reinforces that insurance companies are accountable for their claim decisions, and policyholders have the right to challenge unfair rejections. With health insurance now a critical safety net, consumer forums are playing an active role in ensuring insurers uphold their commitments.
Similar rulings have been seen in other insurance disputes, such as Ghaziabad Dealer Ordered to Pay ₹7.5 Lakh for Delayed Two-Wheeler Insurance Processing, showing that consumer forums are willing to penalize service delays and negligence across all types of insurance.
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