Insurance firm directed to pay over Rs 1 lakh for deficiency

A consumer forum here has said that renewal of an insurance policy always relates back to its original date and on same terms and conditions, while asking a firm to pay over Rs one lakh to its consumer, who was denied full mediclaim.
The New Delhi District Consumer Disputes Redressal forum, presided by C K Chaturvedi, asked the United India Insurance Company Ltd to pay Rs 1,12,213 to one Piyush Agrawal while noting that it had denied the full payment of mediclaim to him by putting a cap on the amount while citing guidelines of Insurance Regulatory and Development Authority (IRDA).

"The information sent to complainant is not proved, nor such a change can be urged or imposed orally to modify an earlier cover note for renewal. The law is well settled that renewal always relates back to original date of policy and on same terms and conditions," the forum said.
It noted that such terms of contract for exclusions or such cases should be on the cover note.
"... We do not find plea of Opposite Party (firm) tenable to accept modification of terms on basis of IRDA guidelines, without actually involving by taking consent of complainant for such a change. The directions of IRDA are to be translated into a contract fact," it said.

"Thus we hold OP guilty of deficiency and direct it to pay balance of Rs 77,213...And pay Rs 35,000 for litigation and harassment," the forum said.

Agrawal had taken a treatment for Hernia and eyelid problem in a private hospital here in February 2008. After the treatment, he sought the entire claim but the firm paid only Rs 30,000, a cap set by it while renewing the earlier policy in January 2008.
Therefore, he filed a complaint with the forum against the company for adding the cap and sought a direction to it to pay the balance of Rs 77,213.

In its reply, however, the company stated that after the permission of the IRDA in 2007, the insurance company had put the cap in the renewal policy issued in 2008, adding that Agrawal was duly informed of this change.