A Haryana District Consumer Commission has slammed a private insurer for paying only 10% of a travel insurance claim for a 73-year-old woman's heart treatment in the US. The court ordered a payout of approximately $90,000.

  • Commission ordered insurer to pay ~90,000 USD (₹86 Lakh).
  • Insurer tried to cap payment at 10% due to pre-existing diabetes.
  • Court ruled the denial was a 'deficiency in service' and 'unfair trade practice'.
  • Victim awarded additional compensation for mental agony.

In a landmark judgment, a Haryana District Consumer Commission has directed a private travel insurance company to pay approximately 90,000 USD (around ₹86 lakh INR) to a 73-year-old woman. The case involved a dispute over a travel insurance claim filed after the woman underwent emergency heart treatment in the United States.

Detailed Background of the Case

The complainant, a senior citizen, had purchased a travel insurance policy covering her and her husband for a 61-day trip to the USA. During the trip, she suffered from acute heart failure and Non-ST Elevation Myocardial Infarction (NSTEMI) in Texas. She underwent angioplasty and was hospitalized for several days, resulting in a massive medical bill of 145,838 USD.

Read Also:NALSAR Student Body Demands Apology from Bar Council Chairman

Despite having a policy with a sum insured of 100,000 USD, the insurer settled the claim for only 9,900 USD—a mere 10% of the coverage. The company justified this by stating that the woman's pre-existing diabetes was a contributory factor to her cardiac condition.

Why This Matters

BozokMedia analysis shows that insurance providers often utilize 'technical grounds' and complex policy clauses to limit their liability during high-value claims. This ruling reinforces the principle that if an insurer accepts a premium with full knowledge of a pre-existing condition, they cannot unilaterally invoke that same condition to reduce the payout during a claim.

The law does not permit insurance companies to accept risks at the inception and then retreat from their liability at the claim stage using technicalities.

The bench, comprising President Jaswant Singh and members Neeru Agarwal and Sarvjeet Kaur, held that the insurer's actions amounted to a gross deficiency in service. The commission noted that the family was forced to arrange huge sums of money urgently in a foreign country due to the insurer's negligence, which could have led to prolonged hospitalization and even higher costs.

Legal Implications and Precedents

The commission highlighted that any ambiguity in an insurance contract must be interpreted in favor of the consumer. Since the policy was issued for the full sum insured without any specific endorsement limiting cardiac cover due to diabetes, the company was legally bound to honor the full claim.

Did You Know?: In consumer law, the principle of 'Contra Proferentem' means that if a contract term is ambiguous, it will be interpreted against the party that drafted it (the insurer).

Frequently Asked Questions

1. Why did the insurer only pay 10% of the claim?
The insurer claimed that because the heart condition was linked to the patient's diabetes, they were only liable for 10% of the sum insured under their specific policy terms.

2. What was the final compensation awarded?
The woman was awarded the remaining claim amount plus ₹1.22 lakh for mental agony, harassment, and litigation costs.