Consumer Commission Orders Insurer to Pay Rs 1.05 Lakh to Dadar Resident

The Central Mumbai District Consumer Dispute Redressal Commission has ordered IFFCO-TOKIO General Insurance Co. Ltd to reimburse a medical claim of Rs 1.05 lakh to Dadar resident Sunderlal D. Kothari, holding the insurance company guilty of unfair trade practices and deficiency in service.

Alongside the full claim amount of Rs 1,05,000, the consumer forum directed the insurer to pay 7 percent interest on an amount of Rs 35,000 from the date of repudiation in 2023 until realization. The commission also awarded Kothari Rs 10,000 towards compensation for mental harassment and Rs 5,000 towards litigation costs.

Kothari, who had purchased a Mediclaim policy from IFFCO-TOKIO, was admitted to P.D. Hinduja National Hospital in critical condition on June 19, 2023. He received treatment for an acute exacerbation of cervical dystonia, a viral upper respiratory tract infection, and related medical complications. The hospital requested cashless authorization from the insurer, but the claim was rejected, forcing Kothari to pay Rs 1.05 lakh directly to the hospital.

Following his discharge, Kothari submitted a reimbursement claim with the necessary documentation. On August 25, 2023, the insurer repudiated the claim, citing a policy exclusion that excluded expenses incurred primarily for investigation and diagnostic evaluation. Kothari later issued a legal notice, but the dispute remained unresolved, leading him to approach the consumer commission.

The insurance firm argued before the forum that the hospitalization was primarily for conservative management and could have been conducted on an outpatient basis. It also noted that it had previously offered to settle 70 percent of the claim, amounting to Rs 70,000, which the complainant had declined.

The commission rejected the insurer's arguments after reviewing hospital records. The documents showed Kothari suffered from fever, chills, body ache, generalised weakness, drowsiness, electrolyte imbalance, and involuntary spasms of the face and neck that caused difficulty consuming food and liquids. The treating hospital confirmed that admission was essential for intravenous fluids, medication, neurological management, and continuous monitoring.

In its written submissions, the hospital described the insurer's claim that admission was unnecessary as incorrect and mischievous. The commission ruled that the policy exclusion did not apply and that the repudiation was arbitrary, while absolving the hospital of any deficiency in service.