The South Mumbai district consumer forum recently directed New India Assurance to compensate a policy holder Rs 3,27,067, with 6% interest from January 2010, after the insurer denied him payout.
The forum also ordered additional damages of Rs10,000 and Rs3,000 as litigation cost reimbursement.
Narayan Purohit, a New Marine Lines resident, had bought the mediclaim in November 2009. From December 23-25, he was hospitalised.
When he had opted for the policy, a company representative had told Purohit it would accept all claims.
But on January 1, 2010, as he filed for reimbursement, New India Assurance refused refund on the ground that the illness was not covered during the first year of the policy.
Purohit issued a legal notice to the firm on July 27, in which he reiterated his demand. When the company did not reply, he approached the forum.
Purohit had paid a premium of Rs 21,611 and his policy was active from November 6, 2009 to November 5, 2010.
After going through the case, the forum sought a response from the firm.
"All medical claims are processed and paid subject to terms and conditions. It has rightly repudiated the claim on the basis of medical information of the treatment, and, more particularly, as per hospital case papers and the discharge card upon which the complainant had relied upon," read New India's reply.
It also claimed that Purohit was treated for hypertension and that's why the claim was refused. In the meantime, Purohit submitted a medical certificate from the Bombay hospital cardiologist who treated him.
The forum held that the firm cannot reject Purohit's claim only on the ground that he was given medicines prescribed for hypertension patients.
"The conclusion drawn by the insurance firm is incorrect and improper," it ruled.