When taking a health, life, car or fire insurance policy, every consumer expects that the insurance company will pay the claim promptly when needed. But in real life, many times the claim gets stuck, gets rejected or the companies sit suppressing the file for months. At such a time, common citizens are afraid of paying lawyer's fees and going to the consumer court.
If the insurance company has refused you, then there is absolutely no need to panic. The 'Insurance Ombudsman' constituted by the Government of India and the Insurance Regulatory and Development Authority of India (IRDAI) is an effective and free way to get your case resolved in a timely and prompt manner without any court fees.
Insurance Ombudsman was established by the Ministry of Finance, Government of India with the objective of providing fair, transparent and speedy resolution of disputes arising between policyholders and insurance companies. There are 17 Insurance Ombudsman offices functioning in different states and major cities (like Lucknow, Delhi, Mumbai, Kolkata, Chennai etc.) across the country.
While cases in consumer courts take years to resolve, the hearing of cases before the Insurance Ombudsman is very simple and informal. The most important thing is that no person needs a lawyer to file a complaint in Lokpal nor does he have to pay any court fee for it. The policyholder can present his views in person or by sending his authorized representative.
As per the rules of the Finance Ministry and IRDAI, the Insurance Ombudsman can now hear complaints related to financial claims up to Rs 50 lakh. If your claim is rejected, the policy is not issued after premium payment, or there is unreasonable delay in receiving the claim amount, then the Lokpal takes strict action.
Complaints lodged with the Insurance Ombudsman are normally required to be resolved within 90 days (3 months). The biggest thing is that the award given by the Lokpal is legally binding for the insurance company. After the decision, the insurance company has to pay the amount to the customer within 30 days. If the insurance company does not comply with the Ombudsman's order within 30 days, heavy damages and interest are also imposed on it.
There is a primary procedure that you must follow before directly approaching the Insurance Ombudsman:
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Written complaint to the insurance company: First of all, the policyholder will have to register his problem with the Grievance Redressal Officer (GRO) of his insurance company through email or written letter.
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30 days waiting: The insurance company is given 30 days to respond to the complaint.
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When to knock on the door of Lokpal?: If the insurance company does not respond to your complaint within 30 days, or if the response/decision given by the company is not acceptable to you, you can approach the Insurance Ombudsman within 1 year from the date of the company's final decision.
Filing a complaint with the Insurance Ombudsman has now become very easy and digital. You can lodge your complaint in two ways:
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Online Portal (Online Mode): Visit the official website of Council for Insurance Ombudsman (www.cioins.co.in). Click on 'Register Complaint' here and upload your policy details, insurance company name, rejected claim letter and your written statement.
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Offline/Email Mode: You can send a complaint to your nearest Insurance Ombudsman office by writing a simple letter or attaching documents (like policy copy, claim rejection letter, and proof of previous complaint sent to the insurance company) on their official email ID.
After the complaint is registered, the Ombudsman office allots a date for hearing (Physical or Video Hearing) to both the parties, where the policyholder can present his views without any pressure.
If the insurance company has rejected your valid claim on technical deficiencies or unclear grounds, there is no need to sit in despair or immediately run to expensive lawyers. Insurance Ombudsman is a transparent and powerful system created to protect the rights of the general public. Read all the terms of your policy carefully, keep the paper evidence safe and if the insurance company is not listening to you, approach the Insurance Ombudsman without hesitation.