CHENNAI: The District Consumer Disputes Redressal Commission (North), Chennai, has held Star Health and Allied Insurance Company and its agent guilty of deficiency in service for rejecting a policyholder's cashless claim, and ordered reimbursement with compensation.
Allowing a complaint filed by Hema Muralikrishnan, the Commission ruled that the insurer's decision to repudiate the claim in the third year of the policy was unsustainable and contrary to the terms of coverage.
The complainant had taken a comprehensive health policy in March 2022 after disclosing diabetes as a pre-existing disease and paying a higher premium to reduce the waiting period. The policy was renewed without a break. She was hospitalised in January 2025 for urosepsis and acute pyelonephritis, but her cashless claim was rejected, citing an exclusion relating to pre-existing conditions.
Rejecting the insurer's contention, the Commission noted that once the waiting period for pre-existing diseases had expired, the exclusion could not be invoked indefinitely to deny claims. "The repudiation of the claim is unjustified," it held.
The bench, comprising President D Gopinath, members Kavitha Kannan and TR Sivakumar, noted that the insurer had accepted the policy after full disclosure and collected higher premiums, but failed to establish that the ailment fell squarely within the exclusion clause. It also observed that a general link between diabetes and infections could not, by itself, justify denial of coverage.
Holding that the rejection of the cashless claim forced the complainant to incur expenses and caused hardship, the Commission directed the insurer and its agent to jointly reimburse Rs 36,711 with 9 per cent interest from January 10, 2025.
It also awarded Rs 25,000 as compensation for deficiency in service and Rs 5,000 towards litigation costs, to be paid within two months.