An insurance company cannot deny the full insured amount under a mediclaim policy based on alleged pre-existing diseases or policy exclusions without providing cogent medical evidence to substantiate such claims. Failure to do so constitutes a deficiency of service and unfair trade practice.

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Order : (Per Hon’ble Sri K.RangaRao- Presiding Officer Member - (Judicial).

1. This appeal is filed by the Appellants/Opposite parties U/s.41 of the Consumer Protection Act, 2019 praying this State Commission to set aside the impugned order dt.10.03.2020 passed in CC. No. 341/2017 of the District Forum-I, Hyderabad, and consequently to allow the appeal as prayed for.

2. For the sake of convenience, the parties are referred to as arrayed in the complaint. The Appellants herein was Opposite parties and the Respondents were Complainants in the CC. No. 341/2017 before the District Forum-I, Hyderabad.

3.The brief averments of complaint are as follows:-

This complaint is preferred under Section 12 of C.P. Act 1986 alleging that refusal to settle the claim in terms of policy amounts to deficiency of service and unfair trade practice hence a direction to the opposite parties to pay the balance amount payable under the policy and award interest and compensation for the loss caused to the complainants on account of death of insured person for failure to provide him necessary treatment on account of the opposite parties refusal to pay the entire insured amount and also further compensation for causing mental agony and to award legal expenses at Rs.25,000/-.

Complainant's case in brief is that Late Rajkumar the husband of the first complainant and father of the complainants 2 to 4 obtained mediclaim policy from the opposite parties covering period from 16-3-2016 to 15-03-2017 and risk covered amount under the policy is Rs.3,00,000/-. While the policy was in subsistence the insured Rajkumar was admitted in Aditya Hospital on 8-2-2017 and was treated in the said hospital for "ACUTE PULMONERY EDIMA WITH TYPE IRF" till 20-02-2017. Soon after admission in the said hospital it was informed to the opposite parties to provide cashless treatment but opposite parties have rejected the same and advised to go ahead with treatment pay the amount and claim reimbursement. As the complainant could not pay the charges in the M/s. Aditya hospital he was shifted to Government hospital where he was succumbed to the illness on 23-02-2017.

4. When the claim was submitted before the opposite parties to settle the same in terms of the policy the opposite parties paid only an amount of Rs.74,111/-instead of assured amount of Rs.3,00,000/- and same was communicated to the complainants by a letter dated 20-2-2017 on the ground that the insured was suffering with pre-existing disease. It was further informed that no further enhancement is possible. The premium amount paid was Rs.8,702/- and assured amount under the policy is Rs.3,00,000/-

Denying to reimburse the total assured amount of Rs.3,00,000/- amounts to unfair trade practice an account of refusal to reimburse the total amount the first complainant's husband was forced to shift Government hospital where he died. If the opposite parties agreed to pay the full assured amount the deceased would have been provided with better treatment and he would have survived. Deceased died at the young age of 43 years and the death was on account of refusal to reimburse the entire assured amount by the opposite parties. On account of untimely death of deceased complainants 2 & 3 who are minor children have lost fatherly affection and financial support to bring them up.

Hence the Hence the complainants are entitled a compensation amount of Rs.20,00,000/-from the opposite parties. They have got issued a legal notice to the opposite party on 31-3-2017 claiming a compensation of Rs.20,00,000/- and having acknowledged it on 5-4-2017