Five reasons Indian insurers deny claims, and how to avoid them

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Insurance companies in India process millions of claims every year, and the majority are approved. The problems arise when documentation does not match disclosures, when timelines are missed or when policyholders misunderstand what their policy actually covers. Here are the five reasons that show up again and again across health, life and general insurance.

Non-disclosure of medical history

The biggest reason for rejected health and life insurance claims is incomplete disclosure of medical conditions. Something as minor as thyroid issues, an old fracture, hypertension or a past surgery can be classified as material information. If it was not declared at the time of purchase, the insurer can legally deny the claim. The simplest fix is full disclosure upfront, even if you think the detail is insignificant.

Lapsed or inactive policies

Many claims fail because the policy was not active at the time of the incident. A single missed premium in life insurance, or an expired renewal in health or motor insurance, instantly nullifies coverage. Insurers will not process claims if the policy date had ended even a day before the event. Always check renewal reminders, grace periods and auto-debit settings to keep the policy active.

Claims filed outside the allowed timeline

Every insurer sets strict timelines for reporting a claim. In health insurance, hospitalisation must often be reported within 24 hours. In motor insurance, the insurer must be alerted before repair work begins. Late intimation allows the insurer to question authenticity, leading to rejections. A single phone call or app notification on time can protect your entire claim.

Policy exclusions misunderstood

All insurance policies contain exclusions, and these are a major reason for denials. Health plans may exclude dental procedures, maternity, pre-existing conditions for waiting-period years or injuries from adventure sports. Motor insurance may exclude mechanical failure unrelated to accidents. Life insurance excludes suicide in the first year and deaths from illegal activities. Understanding exclusions is the only way to avoid nasty surprises later.

Insufficient documentation

Missing hospital bills, unsigned discharge summaries, absence of FIRs in accident cases or lack of proof of ownership in property claims are routine grounds for rejection. Insurers need documents that clearly establish the incident, the timeline and the financial loss. Digitally storing bills, FIR copies, test reports and invoices can make the entire process painless.

What this means for policyholders

Claim rejections are rarely about malice; they usually come down to mismatched details, missing paperwork or misunderstanding of policy terms. A little diligence at purchase and discipline during the claim process can eliminate almost all common rejection triggers.

FAQs

1) Can an insurer reject a claim even if I paid premiums on time?

Yes. Premium payments keep the policy active, but claims can still be rejected for non-disclosure, exclusions, late reporting or missing documents.

2) Are insurers allowed to deny claims for minor medical issues not disclosed earlier?

If the ailment is considered material to risk assessment, insurers are legally allowed to reject the claim. It is always safer to disclose every condition, even if mild.

3) What should I do immediately after a claimable event occurs?

Notify the insurer without delay, gather all required documents and follow the insurer’s instructions before starting repairs or treatment-related payments.