Source: Dalal Street Investment Journal.
An insurance claim denied by the company should always be taken in writing so as to check whether the reason is justified or not
Key Points:
1) The customer has the right to know why a particular claim was denied.
2) With insurance policies becoming specialised it is tough for the common man to understand what is covered and what is not.
I experienced the insurance claims process first hand when my mother was in hospital for two months in the beginning of 2008. In spite of having a mediclaim policy with the same insurer for the past 20 years, our cashless claimwas rejected on flimsy grounds of pre-existing illness. Her condition was critical and hospitalisation couldn't wait. Hence, we had to admit her, pay the bills, and hope the claim would be honoured. By the time she expired in May she had been to three hospitals and the bills had reached astronomical proportions. This led to a lot of pressure to get the insurance claim cleared. Finally, close to six months after she was admitted for the first time (and we had submitted zillions of documents to prove that it wasn't a pre-existing illness), we received a substantial portion of the claim. The entire credit for this must go to my father's meticulous filing and written documentation.
With insurance policies becoming extremely specialised, it has been getting tough for the common man to understand what is covered and what is not under his or her insurance policy. Only when a claim is made does one get to know anything for sure. Often, the innocent customer is told by the insurance company that his bills won't be taken care of by his mediclaim policy. Very often, companies either do not specify a reason for denying a claim or provide a vague reason such as `the claim is not covered under the insurance policy'. While one can blame the insurance agent for not providing proper information about exclusions in an insurance policy, there is no getting back the premium already paid.
The customer however has the right to know why a particular claim was denied. Once the reason has been communicated by the company, the policy-holder can go back to his or her policy document and check whether the denial of claims was justified. For instance, assume that the health insurance policy offered by a private insurer states that it will pay a specific sum in case the policy-holder suffers from a `major inflammation'. In this case, what percentage of inflammation can be called major? The product brochure never mentions any specific percentage and hence you can challenge the insurer if it denies your claim. But to do so, you must know the reason why you have been denied the claim.
There are several ways one can know the reason for refusal: call the insurance company's helpline, its customer grievance cell, the customer service department or visit their office. The insurer's website usually carries contact details such as email address and telephone numbers. In all cases, experts advise that the reason/s for denial should be taken in writing. If the reason given is unsatisfactory or if the company does not respond within a reasonable time frame stipulated on its website or in the papers given to you, you can contact a consumer forum or the insurance ombudsman. Subsequently, you can also decide whether to continue with the same policy or change over to another company or product.
Take Home
While you cannot control what happens at the TPA end, follow the apt procedure in a timely manner to make matters easier for you. To begin with, you need to know very well what your policy covers and what it doesn't. For example, does it cover room rent and doctor's fees? More importantly, initiate the claim well in advance since hospitalization is pre-planned in a majority of cases. Since the authorisation is valid for 15 days to a month, it pays to start the process early. Also, store the TPA's number as it helps to get directly in touch with the TPA in emergencies. Whatever you do, remember to keep all correspondence in writing.
Further, how long does it take to settle a claim? It usually takes a week to 10 days after all the relevant documents are verified by the insurer. The Insurance Regulatory and Development Authority (IRDA) have stipulated that claims should be settled within 30 days of receipt of all the relevant documents. The insurer can ask for clarifications or supporting evidence if he is dissatisfied with the documents. A deadline of six months from the date of intimation of the claim is laid down for its settlement. If the insurer fails to meet the deadline, he has to pay an interest on the sum assured
Post a Comment