Quicktake: If your health insurance claim is denied, you can

  • Write to the insurance company or your agent demanding a written explanation of why the claim was rejected.
  • If you are not satisfied with the reasons provided, you can write to the grievance cell of the insurance company. You can find the email addresses of the grievance cells of different insurers here.
  • If you don’t receive a response in 30 days, or you remain unsatisfied with the resolution, you can approach the Insurance Ombudsman by visiting this website and filing a complaint online with the Ombudsman office in your area. The Ombudsman will dispose of the complaint after hearing all parties.

    Alternatively, you can also file a complaint in the Consumer Court. Although we generally advise people to do this only after they approach the Insurance Ombudsman.

With that brief introduction out of the way, let’s look at this subject in a little more detail

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Reasons why your claim is usually rejected

  1. Non-Disclosure of Pre-Existing Diseases: Most people do not disclose pre-existing diseases assuming that the insurer has no way of finding out. While this may be true during the application phase, they usually find out if you’ve been withholding information during hospitalization. They do this by meticulously going through the discharge summary and other medical documents you provide. And if they find out that you have failed to disclose any information related to pre-existing diseases they will deny your claim and may even cancel the policy.

    So it’s best to make sure that you disclose everything when you fill out your health insurance application.

2. Making a claim during waiting periods: Insurers also have waiting periods for pre-existing diseases including specific illnesses like cataracts and kidney stones. They will not cover your claim during this period.

So to make sure that your claim isn’t denied during the cooling off period, it’s best to buy a policy with little to no waiting periods.

3. Non-coverage of non-medical expenses and consumables: Insurance companies usually exclude non-medical expenses like hospital administration charges and costs associated with consumables i.e. things like gloves, syringes, PPE kits.

So if you want these costs covered, then you need to buy a policy that explicitly covers consumables and non-medical expenses.

4. Making a claim in a Blacklisted Hospital: Insurance companies will also tell you that they will never cover expenses if you are hospitalized in a facility that is blacklisted. Hospitals are usually blacklisted if they have a track record of inflating bills.

So if you have to hospitalized at any point in time, make sure you check the blacklisted hospitals list to avoid claim rejection.

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What to do if your claim is rejected?

(i) As we noted earlier, the first step is to reach out to the insurance company and demand a written explanation for why the claim was denied in the first place. This is important because oftentimes insurance companies may deny a claim based on incomplete information. However, if you can furnish additional documents proving your case, then they may reconsider their decision.

For instance:

One of our clients sustained an ACL injury after falling down the stairs. Initially, the insurance company rejected the claim, citing a two-year exclusion period for ACL surgeries. However, the policy also typically includes a provision for immediate coverage of accidental injuries. We contested the denial, asserting that this was an accident and therefore should be covered. Ultimately, the insurance company conceded and approved the claim.  

A written explanation helps you better assess future options and this should be the first thing you do once your claim is denied.

(ii) If you are unsatisfied with the insurance company’s response, you can then write to the company’s grievance cell. Grievance cells usually operate independently. Their job is to look at the claim itself, and reasons for rejection. They also have to evaluate whether the company has acted fairly. If they feel like the claims team may not have dealt with your case properly, they can reverse the rejection and approve your claim.

To do this, you have to find the email address of the grievance cell for your insurer here. Usually, they’ll have an online complaints form. If they don’t, you can simply send them an email including your policy number, claim intimation number, and why you feel your claim is legitimate. You should hear back from them in 30 days.

However, in our experience we rarely see the grievance cell reverse the claim team’s decision. The unfortunate reality of the situation is that despite knowing this fact fully, we can’t skip this step since you can only approach the Insurance Ombudsman after you receive a response from the grievance cell. Or if you don’t hear from them in 30 days.

(iii) So if you are not satisfied with the resolution provided by the Insurance company’s grievance cell, then you can take your complaint to the Insurance Ombudsman by visiting the website here. Now remember to make sure that you approach the right office. There are different Ombudsmen for different territories and you need to first check the “Offices of Ombudsman” under the “About Us” section to find out which office lies in your jurisdiction.

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Once you do this, you can then click on the "Register complaint" under the Section "Complaint Online" on the website and fill out the information they seek. The Ombudsman will take some time before they respond to your complaint. If they see merit in your claim, they may seek a response from the insurance company and even conduct a virtual hearing. And if they find out that the insurer rejected a valid claim for dubious reasons then they will award the claim amount and additional compensation wherever they see fit.

Finally, you have to remember that this is not the end of the road for you. If you are unsatisfied with the award, you can then approach the consumer court and go all the way to the Supreme Court if you feel like it. However, the fee involved in doing so may not be worth it if you are fighting over a claim totaling a few thousand rupees. So you’ll have to decide what’s the best course of action for you.