Once an insurance company has issued a policy,it cannot later reject the insured person’s claim on the ground that cover was given in violation of terms and conditions,the Delhi State Consumer Commission has ruled.
“Once the insurance company has accepted the proposal it cannot go behind the same even if the proposal is in violation of the criteria mentioned in the insurance policy,” the Delhi State Consumer Disputes Redressal Commission said while asking the Oriental Insurance Co Ltd to pay Rs 16.79 lakh to Narayan Chimandas towards his claim for medical expenses.
The bench presided by Justice Barkat Ali Zaidi observed the insurance company while issuing the policy to Chimandas was well aware that he suffered from heart diseases and high blood pressure and it cannot take the defence of pre-existing disease to deny his claim.
“Despite all the information (regarding the heart disease) the insurance company accepted the proposal for insurance of the complainant (Chimandas),the insurance company cannot now be allowed to resile or avoid the agreement of insurance,as it is stopped from challenging the validity of insurance,” the bench said.
The commission’s order came on the complaint of Delhi resident Chimandas,who had said his claim for medical expenses for treatment undergone while he was in the USA,was rejected by the insurance company on the ground that he had not disclosed his history of heart disease.
He,however,claimed he had disclosed his existing ailments while applying for the Overseas Travel Insurance and he was issued the policy only after a medical examination.
The insurance company had in its defence contended that Chimandas’ claim was denied because he had not disclosed his medical history of heart disease.