How to complain if your COVID-19 claim gets rejected?

The devastating effect of the COVID-19 second wave is being battled by the state and central government. But the sword of COVID-19 third wave is still hanging over our heads. To stay protected against this menacing COVID-19 virus, many individuals have purchased various health insurance policies, including covid insurance, for offering the utmost protection to their family members. The popularity of coronavirus insurance is enhancing day by day as it saves a chunk of money from hospitalization and treatment costs.

But there have been speculations that covid insurance claims are getting rejected or not fully paid to the policyholders by the insurers. Recent statistics have claimed that health insurance companies have received a total of 23.06 lakh claims worth Rs 29,341 crore as of August 6, 2021. Out of these COVID-19 insurance claims, the companies have settled Rs 17,813 crore involving 18.99 lakh claims so far.

What is an insurance claim?

An insurance claim is a formal request that you send to your insurance company for reimbursement/compensation against losses or treatment covered under your policy.

What if your claim is rejected, what should you do?

Once your claim is rejected, as a policyholder, you have every right to ask for the reason from the insurer. Sometimes, because of wrong bills or inadequate documents, your claim may get rejected. By submitting the relevant documents, you can resolve it.

If your coronavirus health insurance claim is rejected, first, you need to approach the grievance committee of the insurance company. Though there is no specific time limit for this action, still, you should approach within 3 years of rejection of the claim. In this way, you can prevent the claim from becoming time banded under laws of limitation.

You can approach the Ombudsman against the decision of the grievance committee. The communication from the insurance company specifies the details of the Ombudsman that needs to be approached.

What is the time limit for reaching an insurance ombudsman?

Within one year from the date of rejection of the complaint by the insurance service provider’s grievance committee, you need to approach the Ombudsman.

If you are unsatisfied with the Ombudsman’s determination, you can make an insurance Ombudsman complaint and approach the consumer court within 2 years.

You should be aware that IRDAI has introduced an online complaints registering system called the Integrated Grievance Management System (IGMS). This is a platform where you can fill up and submit the form with the complaint. Submitted complaints are then forwarded to the insurance company and IRDAI. IRDAI will closely monitor the status of complaints that are submitted through the IGMS portal.

If your claim is partially settled, then will you accept it and later approach the court for full settlement?

Insurance companies often ask for a letter of undertaking from the insured policyholder so that the policyholder can’t proceed with further claims. Don’t give any such undertakings to the insurance company. If the company is forcing you for such undertakings, a protest should be lodged immediately with the company. Under protest, partially settled claims are accepted. You can approach the court to settle the remaining claim. If the consumer has submitted undertakings under pressure from the insurer, this should be disregarded by the court.

How are COVID-19 claims being settled by the companies?

Most insurance companies improve the health insurance claim ratio following IRDAI’s instructions. Still, there are some concerns regarding the settlement. Several market surveys have reported that on July 19, 2021, of the total reported claims of Rs 27,640 crore, claims worth Rs 16,396 crore were settled. So, the settlement range is between 55-65 percent of the claim.

In the first covid wave, the insurance companies have received claims worth Rs 13,736 crore. Out of this, the claims worth Rs 7,125 were settled.

In the second wave (from February 23 to July 19, 2021), the companies have received a total claim of Rs 13,905 crore. Out of this, the claims worth Rs 9,271 crore were settled.

According to IRDAI, how many days can an insurance company take to reimburse the policyholder?

As per the guidelines set by the IRDAI, insurance companies need to close or reject the claim within 30 days from the date of receipt of the last imperative document. If an investigation is required, the insurance company should complete it within 30 days and approve or reject the claim within 45 days of receipt of the last imperative document. If the insurer can’t clear the payment on time, the company needs to pay the interest at a rate 2% above the bank rate from the date of receipt of the last necessary document to the date of payment of claim.

Some prominent reasons why insurance companies are rejecting the COVID-19 claims

• Mild symptoms: Sometimes, insurance companies reject the claims because the patients have mild symptoms and they didn’t need hospitalization. Mild symptoms were when the CT value in the RT-PCR test was on the higher side. Most companies reject Corona Rakshak claims as they assume that no hospitalization is needed for patients.
• Comorbidities: Sometimes, the claims are rejected because of pre-existing comorbidities. This means the patient has one or more additional diseases along with COVID-19. Though comorbid conditions are covered under many corona insurance policies, still, insurance companies are rejecting many such claims.
• Treatment at home: Some corona policies like Corona Kavach specifically cover the treatment of COVID-19 patients at home. Though this policy also covers the purchase of self-care equipment like pulse oximeters, nebulizers, and oxygen cylinders, still, such claims are rejected by insurers.
• Income loophole: Sometimes, claims are getting rejected because of inadequate paperwork. If the insured policyholder’s income doesn’t justify his/her income loss of Rs 2.50 lakh (the sum assured amount under the Corona Rakshak policy), insurers reject the claim.
• The high volume of claims: This is another prime reason why COVID-19 claims are getting rejected by insurance companies. Over the past one and half years, the insurance companies have been jam-packed with high numbers of claims filed by policyholders. In addition, many insurance firms claimed in many cases; patients opted for hospitalization that didn’t require or got admitted to hospitals without consulting doctors. These are some scenarios where the claims are getting rejected by insurance companies.

Therefore, if your insurance company rejects your claim on unclear grounds, you can complain and even approach the consumer court for justice.