Consumer Commission directs New India Assurance to pay ₹20,620 for rejecting the COVID-19 home treatment claim of a 78-year-old Worli resident, along with ₹30,000 in compensation for mental distress and litigation costs | Representational Image
Mumbai: The Central Mumbai District Consumer Dispute Redressal Commission has reprimanded the New India Assurance Company for rejecting a claim submitted by a 78-year-old Worli resident, Rajan Alimchandani, for home treatment expenses during the COVID-19 pandemic. The commission found the company at fault for rejecting the claim on the grounds that there was no hospitalization.
In its order, the commission stated: “The insurance company made an error while processing the claim. The complainant underwent treatment at home under a doctor’s supervision, with periodic visits. As a senior citizen diagnosed with COVID-19, the decision not to hospitalize him was made by his doctor to ensure his safety and prevent exposure to other infections. The complainant was kept in home isolation for treatment. Rejecting the claim on the grounds of no hospitalization was a deficiency in service. Therefore, the complainant is entitled to the insurance claim amount of Rs 20,620.”
The commission also noted that the complainant had to engage in repeated correspondence and follow-ups with the insurance company, causing him mental agony. As a result, the commission directed the insurance company to pay an additional Rs 25,000 as compensation for mental distress and Rs 5,000 towards litigation costs.
In August 2022, Rajan Alimchandani tested positive for COVID-19. His doctor, prioritizing his safety, decided against hospitalizing him and instead advised home isolation. Alimchandani initially sought advice from a medical specialist over the phone, reporting symptoms of high fever, body ache, runny nose, and cough. The specialist suspected either dengue or COVID-19, prescribed medication, and recommended bed rest.
When his symptoms did not improve, Dr. Manoj Rohra visited Alimchandani’s home on August 30, 2022, and conducted a thorough examination. Tests including a chest X-ray, ECG, and kidney function were carried out to ensure no vital organs were affected. Dr. Rohra prescribed medication and advised Alimchandani to continue treatment at home with regular health reviews over the phone.
Alimchandani informed the insurance company about his condition and submitted a claim for the incurred expenses via SMS. However, the company rejected the claim, citing policy terms that require a minimum of 24-hour hospitalization to qualify for benefits.
In its defense, the insurance company argued that the claim was inadmissible under the policy terms, which clearly exclude outpatient department (OPD) treatment. They contended that the complaint was frivolous and stated that no deficiency in service or unfair trade practice had been committed. The company highlighted that their third-party administrator (TPA), Raksha TPA, observed no hospitalization in the case and deemed the claim inadmissible under the exclusion clause.
The commission dismissed the insurance company’s arguments, stating that the treatment provided under a doctor’s supervision for COVID-19, even at home, warranted coverage. The rejection of the claim constituted a deficiency in service, and the insurance company’s actions caused unnecessary mental distress to the complainant.
The commission ordered the insurance company to pay the claim amount of Rs 20,620, Rs 25,000 for mental agony, and Rs 5,000 for litigation costs, holding the company accountable for its unfair practices.
