Articles September 27, 2019

How to get Complaints Resolved when Insurance Companies don’t act?

A real-life case study on how to resolve your issue/complaint when the insurance company doesn’t co-operate? Should you just sit silently and wait in anticipation or #takecharge?

What is an insurance complaint?

In the insurance sector, insurance complaint is a grievance or a written expression about the dissatisfaction or discontent related to the insurance provider, broker or agent. An insurance complaint can also be related to matters like lack of proper action, lack of proper service or the deficiency of service.

How to make insurance complaints?

In earlier times, insurance complaints were even lodged by simple verbal communication. However, this system has changed and now only written expression which might be by electronic medium also is considered to be an insurance complaint. It is quite easier today to lodge insurance complaints through online methods. Most of the insurance providers feature customer support and customer grievances section on their official web portal. Policyholders can find the contact details or email addresses to which the complaints must be sent. Also, policyholders can call up the customer support centers of their respective insurance providers and lodge their complaints.

Moreover, policyholders can directly lodge their complaints with the IRDAI (Insurance Regulatory and Development Authority of India) by an integrated system known as the Integrated Grievance Management System. This system can be defined as a new online complaint registration system that is integrated with the complaint systems of various insurance providers. By this system, quick resolution to the grievances can be done and even tracking of policyholder’s complaints has become feasible.

Non-redressal of grievances by insurance providers

Usually, insurance companies should respond to the grievances of the policyholders within a period of 2-3 business days and resolve the grievance within a period of 15 days. However, there can be situations in which your complaint has been rejected by the insurance provider or it has not been resolved even after long waiting periods. This can be termed as the non-redressal of grievances by the insurance providers.

Let us illustrate this situation with a simple case study.

Lata had purchased a health insurance policy of Rs. 2 lakhs with a renowned health insurance provider. According to the clause of the health insurance policy purchased by Lata, in case of absence of any past history related to illness or health problems the insurance provider will provide coverage for all the expenses related to hospitalization.

Few days back, Lata was having health problems and was hospitalized. The bills were calculated and a final bill of Rs. 10,000 was given to Lata by the hospital authorities. The insurance provider followed the proper procedures and had stated that the entire amount of Rs. 10,000 would be reimbursed.

Now, Lata has received the settlement amount from the insurance provider and it is a cheque of Rs. 5000 which was not the correct settlement of the claims made by Lata. Then, Lata had lodged a written complaint against the insurance providers. After 15 days, the insurance provider replied to the complaint that the claim by Lata is unreasonable and has been rejected without stating any proper reason for the rejection of the claim.

Since then Lata has written many complaints, called up the customer support team and informed them but there has been no action or response from their side yet. Now, what should Lata do to get her grievance resolved when she has faced such disappointment with the insurance company?

How to resolve complaints in case of non-redressal by insurance providers?

In such a scenario, Lata should first of all register a complaint with the Insurance Ombudsman. Insurance Ombudsman scheme helps the policyholders in getting their complaints or grievances resolved when those have been rejected or not being resolved up to satisfaction by the insurance providers. Insurance Ombudsman acts as a mediator and makes a fair judgment based on the facts. Also, in case of further issues on settlement, the Ombudsman passes an award which is final for the insurance provider.

However, many insurance providers accept the orders passed by the Insurance Ombudsman but do not implement them diligently and on time. But, there is no way out for the insurance providers to non-comply with the award or orders passed by the Ombudsman. The insurance providers will be questioned regarding the cause for delay in compliance. By an award of Ombudsman, a maximum amount up to Rs.30 lakhs can be allocated to the policyholder after 3 months of receipt of necessary documents.

Even then, if the policyholder is not satisfied with the judgment then he can approach the consumer court and file a case against the insurance provider. However, it is always advisable to settle out these grievances and complaints out of the court to avoid further hassles.