The District Consumer Disputes Redressal Commission in Ernakulam has held National Insurance Company Ltd. responsible for a deficiency in service and directed the company to compensate the complainant. The case was presided over by President Shri D.B. Binu, and members Shri V. Ramachandran and Smt. Sreevidhia T.N.
The bench noted that the insurance company failed to file any response to the complaint, which led to the evidence presented by the complainant remaining unchallenged. As a result, the Commission ruled in favor of the complainant.
Background of the Complaint
The complainant had purchased an insurance policy from National Insurance Company for the period between November 28, 2021, and November 27, 2022. On October 7, 2022, the complainant was admitted to Rajagiri Hospital, Aluva, for knee replacement surgery and was discharged on October 12, 2022. The total cost of the treatment amounted to Rs. 2,26,117. The complainant claimed this amount from the insurance company.
However, the insurance company only reimbursed Rs. 77,063, which included a cumulative bonus, even though the total policy amount was Rs. 2,80,000. The complainant sought the remaining amount from the insurance company, but the company did not address her grievance. After sending a legal notice through her husband, the complainant received a reply from the insurance company, but it lacked proper justification.
Legal Action and Commission’s Decision
Frustrated with the lack of response, the complainant approached the District Consumer Disputes Redressal Commission in Ernakulam, seeking the full policy amount along with compensation for the mental agony and difficulties caused by the insurance company’s refusal to settle the claim fully.
Upon reviewing the documents provided by the complainant, including the policy card, discharge summary, legal notice, and hospital bills, the Commission found that the complainant had a policy with a sum of Rs. 2,00,000, plus a bonus of Rs. 40,000. The Commission determined that the total amount payable to the complainant was Rs. 1,49,054. Additionally, the complainant’s hospitalization occurred within the policy period.
As the insurance company failed to appear before the Commission, the case proceeded ex-parte (in the absence of the opposite party).
Ruling on Deficiency of Service
The Commission noted that the insurance company had denied the full claim without adequate justification. Referencing a previous ruling in the case United India Insurance Co. Ltd Vs. Pushpalaya Printers (2004 KHC 795), the Commission reiterated that any ambiguity in an insurance policy should be interpreted in favor of the insured.
In its final order, the Commission directed the insurance company to pay the complainant the remaining claim amount of Rs. 1,49,054, along with Rs. 5,000 as compensation for deficiency in service and an additional Rs. 5,000 to cover litigation expenses.
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