An insurance policy is meant to provide financial support when an unexpected event occurs. But when an insurer rejects a claim, policyholders may have to navigate unfamiliar procedures, understand policy exclusions and decide whether challenging the decision is worth pursuing.
A rejected claim does not automatically mean the insurer has acted unlawfully. Some claims are declined because the policy does not cover the loss, required conditions were not met or relevant information was not disclosed. In other cases, the rejection may be based on an incorrect interpretation of the policy or insufficient grounds.
The important question is whether the insurer had a valid reason to reject the claim. Indian law provides several ways to challenge a decision, depending on the nature of the dispute.
1. Start by Understanding Why Your Claim Was Rejected
Before taking any action, obtain and carefully read the insurer’s claim-rejection letter. It should explain the reason for repudiation and identify the relevant policy terms or grounds relied upon.
Common reasons for rejecting insurance claims include:
- Policy exclusions: The loss or event may fall within an exclusion expressly stated in the policy.
- Non-disclosure or misrepresentation: The insurer may allege that material information was withheld or inaccurately provided when the policy was purchased.
- Lapse or non-payment: The policy may have lapsed or ceased to provide the relevant cover.
- Failure to meet policy conditions: The insurer may claim that a required procedure, notification or document was not completed.
- Insufficient evidence: The documents submitted may not establish that the insured event occurred or that the claimed loss is covered.
The reason matters because different disputes require different responses. A disagreement about the meaning of an exclusion is not the same as an allegation of fraud or non-disclosure.
If the rejection letter is unclear, ask the insurer to explain the specific policy clause and facts on which its decision is based. Keep a written record of the request and the response.
2. Review the Policy and Gather Supporting Documents
Once you understand the stated reason for rejection, compare it with the policy wording and the documents submitted with the claim.
Read the policy schedule, terms and conditions, exclusions, endorsements and any applicable add-on cover. Check whether the insurer has relied on a clause that actually applies to the circumstances of your claim.
For example, a health insurance claim rejected on the ground of a waiting period requires a different examination from a motor insurance claim rejected because of an alleged breach of policy conditions. The exact wording and facts will determine whether the insurer’s reasoning is justified.
Collect documents relevant to the dispute, such as:
- The policy document and renewal records.
- The claim form and claim reference number.
- The rejection or repudiation letter.
- Medical records, hospital bills or discharge summaries, where relevant.
- FIRs, repair estimates, photographs or survey reports, where relevant.
- Emails, letters and other communication with the insurer.
Keep copies of everything, including proof of when documents were submitted. If the insurer relies on a report or document you have not received, request a copy.
A well-organised record makes it easier to identify factual errors and explain why the claim should be reconsidered. It also helps if you later approach a grievance authority or a consumer forum.
3. Raise a Formal Complaint with the Insurer
The first formal step is generally to approach the insurer’s Grievance Redressal Officer (GRO). Insurers are required to have a grievance-redressal mechanism for policyholders.
Submit a written complaint explaining why you disagree with the rejection. Refer to the relevant policy terms, identify any factual errors and attach supporting documents. Clearly state the resolution you are seeking, such as reconsideration of the claim or a reasoned explanation of the decision.
Keep the complaint concise and factual. Avoid relying only on a statement that the rejection is unfair. Explain precisely which part of the insurer’s reasoning you dispute.
According to IRDAI’s published grievance guidance, the insurer should resolve a grievance within 15 days of receiving it. Keep the acknowledgement and note the date of submission. If the insurer does not respond within the prescribed period, or its response is unsatisfactory, you can escalate the complaint.
A formal grievance gives the insurer an opportunity to review its decision. It does not guarantee that the claim will be approved.
4. Escalate the Complaint Through IRDAI’s Bima Bharosa Portal
If the insurer does not resolve the complaint satisfactorily, you can approach the Insurance Regulatory and Development Authority of India (IRDAI) through its Bima Bharosa grievance platform.
Bima Bharosa is an online system that allows policyholders to register complaints and track their progress. A complaint submitted through the portal is forwarded to the insurer and recorded in IRDAI’s grievance-monitoring system.
You can register a complaint through the IRDAI Bima Bharosa portal.
You may also contact IRDAI through its grievance call centre at 155255 or 1800 4254 732, or by email at complaints@irdai.gov.in.
When submitting a complaint, include the insurer’s name, policy and claim details, the rejection letter, copies of your earlier grievance and the response received, if any. Explain what remains unresolved.
IRDAI’s role is primarily regulatory and supervisory. It facilitates grievance resolution and can take up complaints with insurers, including where regulatory issues may be involved. Bima Bharosa is not a court or a substitute for a consumer adjudication process. Registering a complaint does not itself mean that IRDAI has ordered the insurer to pay the claim.
According to the portal’s published process, if a complaint is not attended to within 15 days of registration, or the insurer’s resolution is unsatisfactory, the policyholder may approach the Insurance Ombudsman, subject to the applicable rules.
5. Consider Approaching the Insurance Ombudsman
The Insurance Ombudsman provides a specialised, relatively accessible mechanism for resolving eligible insurance complaints. It is governed by the Insurance Ombudsman Rules, 2017, as amended.
A policyholder may approach the Ombudsman for certain disputes involving an insurer, including repudiation or partial settlement of claims, subject to the Rules and the Ombudsman’s jurisdiction.
The current monetary ceiling is ₹50 lakh, including the claim amount and expenses, if any, claimed. The complaint must fall within the Ombudsman’s jurisdiction and satisfy the applicable procedural requirements.
Before approaching the Ombudsman, the complainant must generally have first made a written representation to the insurer. The complaint may be filed if the insurer has rejected the representation, has not provided a satisfactory response or has not replied within one month of receiving it.
The complaint must ordinarily be made within one year of the insurer’s rejection of the representation, or of the insurer’s final reply, as applicable under the Rules. The Rules also restrict complaints where the same subject matter is already pending before, or has been decided by, a court, consumer forum or arbitrator. A complainant should check the precise eligibility conditions before filing.
The Ombudsman process is intended to be accessible and does not require the complainant to approach a lawyer. Complaints can be submitted through the Council for Insurance Ombudsmen’s official channels.
The Ombudsman may attempt conciliation and, where the matter is not resolved, may pass an award in accordance with the Rules. An award is binding on the insurer if accepted by the complainant, subject to the applicable requirements. The Ombudsman’s decision is not automatic: the outcome depends on the facts, evidence and applicable policy terms.
6. File a Complaint Before the Appropriate Consumer Commission
If the dispute concerns deficiency in service or an unfair practice by the insurer, a policyholder may consider filing a complaint before the appropriate Consumer Commission under the Consumer Protection Act, 2019.
Insurance is treated as a service under consumer law, and an insurer’s handling of a claim may be examined where the facts disclose a legally actionable consumer dispute. A Commission can consider the policy, the insurer’s reasons for rejection and the evidence placed before it.
The Consumer Commissions have three levels of pecuniary jurisdiction. Under the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021, jurisdiction is determined by the value of the goods or services paid as consideration:
- District Commission: Up to ₹50 lakh.
- State Commission: More than ₹50 lakh and up to ₹2 crore.
- National Commission: More than ₹2 crore.
These thresholds are based on the consideration paid, not simply the amount of compensation a complainant seeks. Territorial jurisdiction and other statutory requirements must also be considered when deciding where to file.
Under Section 69 of the Consumer Protection Act, 2019, a consumer complaint must ordinarily be filed within two years from the date on which the cause of action arises. A Commission may admit a complaint filed after this period if sufficient cause for the delay is shown and the Commission records its reasons for condoning it.
Do not assume that approaching the insurer, IRDAI or the Ombudsman automatically pauses or extends the limitation period for filing before a Consumer Commission. If the deadline may be approaching, seek legal advice promptly.
Depending on the evidence and the applicable law, a Consumer Commission may grant relief such as directing the insurer to settle a claim, awarding compensation or granting other relief within its powers. The complainant must establish the basis for the relief sought; filing a complaint does not guarantee a favourable order.
7. What Does the Supreme Court Say About Rejected Claims?
The Supreme Court’s decision in Mahakali Sujatha v. The Branch Manager, Future Generali India Life Insurance Company Limited & Another, Civil Appeal No. 3821 of 2024, decided on 10 April 2024, illustrates why the evidence supporting a rejection matters.
The case concerned the repudiation of life insurance claims on the ground that the insured had failed to disclose existing policies with other insurers. The insurer relied on information about those alleged policies, but the Supreme Court found that the insurer had not produced adequate evidence to establish the alleged suppression. A tabulation of policy details, without supporting evidence, was insufficient in the circumstances.
The Court also considered the applicable version of Section 45 of the Insurance Act, 1938. Since the policies in question predated the 2014 amendment, the Court applied the earlier provision. It held that the insurer had not discharged the burden of proving the alleged fraudulent suppression of material information and set aside the National Consumer Disputes Redressal Commission’s order.
The judgment does not mean that non-disclosure can never justify repudiation. It demonstrates that an insurer must establish the grounds on which it relies, and that the legal requirements depend on the relevant facts and the applicable version of the law.
8. When Should You Consider Civil Court Proceedings?
A civil court may be relevant in some insurance disputes, depending on the nature of the claim, the relief sought and the jurisdiction of the court. It is not necessarily the next step in every rejected-claim dispute.
Consumer Commissions provide a statutory forum for eligible consumer disputes, while the Insurance Ombudsman handles complaints within its defined jurisdiction. A civil suit may involve different procedural requirements, limitation rules and questions about whether the dispute is maintainable before that court.
Before filing a civil suit, consider obtaining legal advice on the appropriate forum, limitation and available remedies. The existence of more than one possible route does not mean that the same dispute can be pursued simultaneously in every forum.
Conclusion
A rejected insurance claim deserves careful examination, but rejection alone does not establish that the insurer has violated the law. The policy wording, the reason for rejection and the evidence available all matter.
Start by obtaining the insurer’s written reasons, reviewing the policy and submitting a formal grievance. If the matter remains unresolved, Bima Bharosa, the Insurance Ombudsman or a Consumer Commission may provide a route for further review, depending on eligibility and jurisdiction.
Keep records of every communication and pay close attention to filing deadlines. Most importantly, do not assume that one grievance process suspends the limitation period for another. Understanding the available remedies and the requirements attached to each can help policyholders decide how to proceed.
Disclaimer: This article is intended for general legal awareness only and does not constitute professional legal advice.