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When 2.5 Hours Made All the Difference – But Not Enough for Insurers
In a landmark ruling for pandemic-era policyholders, the has slammed Star Health and Allied Insurance Co. Ltd. for rejecting a COVID-19 claim over a mere 2.5-hour shortfall in hospitalization. The bench, led by President Sri. C.T. Sabu alongside Members Smt. Sreeja S. and Sri. Ram Mohan R. , directed the insurer to pay complainant Robin A.K. the full ₹1 lakh sum insured, plus compensation and costs. This decision underscores that insurance terms must be , not hyper-technically.
From Policy Purchase to Claim Denial: The COVID Hospital Ordeal
Robin A.K., a resident of Aloor P.O., Chalakudy, bought Star Health's Corona Rakshak Policy (No. P/181217/01/2021/004089) on , valid until . With a ₹1 lakh sum assured, it promised a lumpsum payout on positive COVID-19 diagnosis followed by at least 72 hours of continuous hospitalization.
On , Robin tested positive and was admitted to Kinder Multispecialty Hospital, Kalamassery, discharged on – roughly 70 hours later. He filed claim CIR/2021/181217/0410287, but Star Health repudiated it on (Ext. A3), citing the policy's strict 72-hour clause (Clauses 3.7 & 3.8, per Ext. B1). Frustrated, Robin sent a lawyer's notice (Ext. A4), met with an unyielding reply (Ext. A5), and approached the Commission on (CC 159/21).
Insurer's Hardline Stance vs. Complainant's Plea for Fair Play
Star Health admitted the policy issuance and Robin's COVID diagnosis but stood firm: hospitalization fell short at ~70 hours, breaching the policy's explicit terms. They invoked the Supreme Court's Surajmal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd. (2010) 10 SCC 567, arguing courts must policy conditions without additions or subtractions.
Robin countered that the rejection was frivolous under the . He emphasized – positive diagnosis, inpatient treatment at a recognized hospital – fulfilling the policy's core aim of aiding genuine COVID cases amid a raging pandemic.
Beyond the Fine Print: A Call for Commercial Sense in Insurance
The Commission dissected the policy (Ext. A1) and prospectus (Ext. B1), noting its benefit-based nature to ensure claim genuineness. While acknowledging strict construction principles from Surajmal (for coverage extent), it distinguished that defeats policy objects. Drawing from , it stressed advancing the policy's purpose.
Judges highlighted pandemic realities: shorter stays due to medical advances and bed shortages for new patients.
"Advancement in medical science... has reduced hospitalisation duration,"
they observed, rejecting mechanical 72-hour enforcement. The 2.5-hour gap wasn't a "
," especially with Star Health's dominant position demanding
.
Rejecting the repudiation as "," the bench prioritized fairness over rigidity.
Punchy Quotes That Hit Home
"The shortfall of about 2.5 hours does not amount to . Insurance policies are to be interpreted in a commercially sensible manner..."
"Shorter hospital stays do not imply less severity of illness... technical conditions relating to duration must be ."
"The insurer who holds a dominant position is therefore expected to act fairly and in in matters concerned with health insurance."
"Repudiation of the complainant’s claim solely on the ground of 2.5 hours shortfall in hospitalisation is in law."
Payout Ordered: Justice with Interest
The complaint succeeded fully. Star Health must pay ₹1,00,000 (sum insured), ₹10,000 (compensation for agony and loss), and ₹5,000 (litigation costs), all with 9% interest p.a. from , within 45 days.
This ruling, echoed in reports like the one from legal portals, signals relief for COVID claimants facing nitpicky denials. It may prompt insurers to rethink rigid terms, benefiting future health policy disputes by favoring substance over minor procedural slips.
