Page 23 - The Insurance Times October 2025

grievance among policyholders. These rejections are often failed to obtain clear consent for revised policy terms
due to discrepancies between the insured's expectations and upon renewal.
the insurer's interpretation of coverage.
Fact: In FY 2023-24, Indian health insurers repudiated 4. Premium-Related Disputes
nearly 13% of claim value, with an additional 9% of Though not as frequent as claim issues, disputes regarding
claims pending for further review (Business Standard, premium calculation or post-claim adjustments have become
2024). more visible.

Insight: Common reasons for repudiation include non- Fact: New India Assurance reported a low claim
disclosure of material facts, violation of policy terms, repudiation ratio of 0.2% in FY 2022-23, yet premium
or disputes over causa proxima-the nearest cause of the hikes after minor claims triggered dissatisfaction
incident. (Telangana Today, 2023).
Example: In a notable case, the Telangana State Insight: Policyholders often contest premium increases
Consumer Commission ruled that LIC had wrongfully that follow a claim, especially when they believe the
repudiated a Rs.7.5 lakh accidental disability claim. The increase is disproportionate or unexplained.
insurer was directed to pay the full amount along with
interest and compensation. 5. Non-Issuance or Delay in Documentation
Policyholders frequently report that after payment of the
2. Delays in Claim Settlement premium, they do not receive timely documentation such
Timely claim settlement is critical, especially for small as the policy bond or endorsements.
businesses relying on insurance for financial continuity. Fact: According to updated IRDAI guidelines, insurers
Unfortunately, processing delays remain a recurring issue. cannot reject claims solely because the policy document
Fact: IRDAI mandates that insurers settle claims within was not issued, provided the premium was paid and
30 days of receiving all required documents, beyond coverage presumed.
which they must pay a penalty at bank rate +2% (IRDAI Insight: However, technical errors or backend delays
Circular, 2023). still prevent timely issuance, complicating claim filing
Insight: Delays are usually attributed to incomplete processes.
documentation, pending third-party reports (like FIRs), Example: Several cases involve policyholders unable to
or internal inefficiencies. prove coverage during emergencies because they
Example: A policyholder waited eight years for partial lacked physical or digital documentation.
compensation following a vehicle theft, due to
prolonged FIR clarification. The claim was finally settled 6. Poor Communication and Follow-Up
after consumer forum intervention. Communication breakdown between insurers and insured
individuals contributes significantly to grievances.
3. Disputes Over Policy Terms and Exclusions Insight: Policyholders often report delayed updates or
Many grievances arise when claimants discover that specific vague responses such as "claim under review," with no
incidents are excluded from coverage or that key policy escalation mechanism in place.
clauses were not clearly communicated at the time of Example: A customer shared that they had to wait over
purchase. two months for updates from Care Health Insurance,
Fact: Nearly 35% of insurance-related consumer eventually considering an Ombudsman complaint due
complaints in 2023-24 involved issues with policy to poor service.
wording, hidden exclusions, or ambiguous terms
(Economic Times, 2024).
7. Irrelevant or Excessive Documentation Demands
Insight: Disputes often occur when policyholders In some cases, insurers have been reported to demand
interpret coverage differently than what is defined by documentation unrelated to the nature of the claim,
the insurer, particularly in liability claims involving grey creating unnecessary hurdles.
areas like negligence or third-party injury. Insight: This tactic may be used to delay or discourage
Example: A court reversed New India Assurance's denial claims, particularly in high-value or sensitive scenarios.
of a stock damage claim, citing that the insurer had Example: One complainant, whose spouse died due to

22 October 2025 The Insurance Times