Claim Outside Scope Of Policy: Uttarakhand State Commission Dismisses Complaint Against Oriental Insurance

Brief Facts of the Case

The complainant purchased a 'Happy Family Floater Policy' from the Oriental Insurance Company/insurer. It covered him, his parents, and his daughter. The policy was renewed for another year. His mother fell seriously ill and was admitted to a hospital. The complainant spent over ₹54,000 on her treatment. The insurer refused to pay even after he completed all formalities. He sent a legal notice but got no reply. The complainant filed a complaint before the District Commission, alleging a deficiency in service. The District Commission found that the policy was valid during the treatment period and held that the claim denial was unjustified. It directed the insurance company to pay ₹60,000 to the complainant within a month, including medical expenses and compensation. Aggrieved, the insurer filed an appeal before the State Commission of Uttarakhand.

Contentions of Oriental Insurance

The insurer argued that the complainant's mother was treated for diabetes and chronic renal failure. They claimed this fell under the exclusion clause of the policy. According to them, treatment for diabetes was not covered in the first two years of the policy. Since the treatment took place during the second year, they said the claim was not payable. They maintained that there was no deficiency in service on their part.

Observations by the State Commission

The State Commission reviewed the terms and conditions of the policy and found that diabetes was actually included under the conditions not covered within the two-year waiting period. As treatment occurred in the second year, the Commission concluded that the exclusion clause applied. It further concluded that the District Commission erroneously granted ₹60,000 without regards to this clause. It held that the claim did not come within the purview of the policy and that there was no insufficiency of service by the insurer. In accordance with this, the State Commission granted the appeal, overturned the District Commission's order, and dismissed the complaint.

Case Title: The Oriental Insurance Co. Ltd. & Anr. Vs. Sh. Shivnath Chaturvedi

Case Number: SC/5/A/13/246

Click Here To Read/Download The Order