Case Study 15 - Insurance co to pay Rs 50K as ‘compensation’

The Delhi State Consumer Commission has directed an insurance company to pay a compensation of Rs 50,000 to a policy holder whose mediclaim was wrongly rejected on the ground of pre-existing disease.

"The insurance company shall pay to the policy holder a sum of Rs 2.50 lakh on account of medical expenses, Rs 50,000 (compensation) towards harassment and mental agony," the Commission headed by President Justice Barkat Ali Zaidi said.

The Commission passed the order on an appeal filed by New India Assurance Corporation Limited, challenging Delhi District Forum order of paying compensation to policy holder Indira Kanwar, who was denied mediclaim on the ground that she concealed her heart ailment at the time of taking the policy.

"It was the sixth time of obtaining the policy during which she suffered with the heart disease. It will thus appear that before August 20, 2001, when she suffered from heart trouble, she had already taken five policies in continuation," the Commission said.

It rejected the insurance company's contention that the heart ailment was pre-existing at the time of taking the policy in 2003.

Earlier, the Forum ordered the insurance company to compensate Kanwar, saying that it should have satisfied itself before issuing the mediclaim policy that she was free from all diseases