Penalty, compensation ordered against insurance firm for denying claim

Dharwad: The District Consumer Grievances Redressal Commission has ordered penalty and compensation against SBI General Insurance Company in a medical insurance claim dispute filed by an engineer from Vidyanagar in Hubballi.According to the complaint, Mohan Mudgal had purchased a health insurance policy from the company. During the policy period, he developed severe knee pain and initially consulted orthopaedic surgeon Dr Vivek Patil. Based on medical and family advice, he later underwent treatment in Mumbai under specialist Dr Sharmila Tulpule and underwent knee replacement surgery. He reportedly spent Rs 3.2 lakh for the treatment.
After discharge, Mudgal submitted all medical records and sought reimbursement from the insurer. However, the company rejected the claim stating that the treatment obtained was not covered under the policy terms.Alleging deficiency in service under the Consumer Protection Act, Mudgal filed a complaint before the Dharwad District Consumer Commission on Sept 26, 2024.After detailed hearing, Commission president Eshappa Bhute and member Vishalakshi A Bolashetty observed that the complainant had taken insurance for health security and the treatment was undertaken during the valid policy period. The Commission also noted that the insurer failed to produce evidence to prove policy exclusion or other grounds such as pre-existing conditions or lifestyle-related exclusions. The Commission also referred to a Punjab State Consumer Commission ruling stating that allopathic treatment is covered under health insurance policies.The Commission ruled that the complainant is eligible to receive the insurance claim amount. It directed the insurance company to pay Rs 3.2 lakh towards medical expenses with 10% annual interest until full settlement. Additionally, the commission ordered the insurer to pay Rs 50,000 towards mental agony and inconvenience and Rs 10,000 towards litigation expenses.