Options Customers Have Once Their Claim is repudiated

Motor insurance is a great way of making sure you can protect your interests in your vehicle during the tough times. But sometimes, despite having insurance, things may not go as smoothly as you had expected them to be. No matter how watertight your insurance contract appears to be at the time of buying the policy, there are certain loopholes in the contract that benefit the insurance companies to repudiate your claim.

Repudiation of claim is an anticipatory breach of insurance contract based on the strong belief or evidence that performance of the insurance contract terms will not be upheld and the insurance company cannot fulfill its obligation under the said contract. Now it becomes the duty of the insured to take the matter to the right authority to prove that the insurer is in the breach of contract so that the innocent party or the insured may claim damages for his loss.

It has been observed that in spite of utmost care on the part of the insured, the rejection of claims continues to happen.So, when you lodge a claim with your insurance company and it gets rejected, is it the end of the road? Not always.

Here are certain options available to you to obtain your claim.

1. Launch a formal complaint with the Insurer’s Grievance Redressal Cell, in the Zonal or Central Office of the insurance company giving all details of your motor policy stating why you think your claim should not have been rejected.

2. If you do not receive a satisfactory reply within two weeks in the TAT (Target Turnaround Times) of IGMS (Integrated Grievance Management System) of IRDAI, you can approach IRDA and register a complaint with the IRDA’s Protection of Policy Holder’s Interest regulations, 2017.

3. If you do not receive a satisfactory reply even then, the next option would be to approach the Insurance Ombudsman, the independent body created under the Redressal of Public Grievance Rules, 2017 with the sole objective to resolve complaints relating to the settlement of insurance claims in an impartial and cost-effective manner.

4. The claimant or his legal heir can launch a complaint in writing with the Ombudsman, within whose jurisdiction the concerned Insurance branch is located.

5. Before taking the matter to the Financial Ombudsman services, it is advised to hire an independent loss assessor, to look into the technicalities of damage estimation and prepare his report which is to be submitted as evidence.

6. Insurance Ombudsman has the power in the Redressal of Public Grievances Rules, 2017, to act as a counselor or mediator in the matters related to a partial or total repudiation of claims by an insurer.

7. After all the above remedies have been exhausted then as a final recourse, the complainant can approach the Consumer Court, under the Consumer Protection Act, 1986. He can plead before the court in person without any need of an advocate.

8. In fact, you have the option of directly approaching the Consumer Forum or a Consumer Court without approaching IRDA or other Investigators. But that is a very time-consuming process.

According to a new IRDA circular (Ref – IRDA/HLTH/MISC/CIR/216/09/2011), companies cannot reject claims merely on technical grounds particularly when there is delay in submission of documents or intimation in certain inevitable circumstances.

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