What to do when insurers delay or reject claims — your rights as a user

Representative image

Buying insurance is like a safety net — you pay premiums and hope that when things go wrong, the insurer will get you out of trouble. But policy holders discover the other way around: delayed settlement of their claims, back-to-back paperwork, or outright refusal. Health insurers, in particular, refer to "non-disclosure" or "policy exclusions," motor and travel insurers refer to technicalities. For a family that depends on money in the event of an emergency, this feels like betrayal. What is reassuring is that laws around insurance in India gives you certain rights, and you don't have to accept the insurer's refusal at face value.

Understand why claims are delayed or rejected

Delays generally occur because the insurers request further documentation or clarification. Rejection is often due to non-disclosure of previous diseases, lapsed policies, non-payment of premium, or claims that are excluded. At times, the reason can be as minor as the non-matching hospital bill with the treatment stated on the discharge summary. Being aware of such common triggers enables you to be better prepared and refrain from errors when applying for a claim.

Start with the insurer’s grievance cell

All insurers in India have to set up a grievance redressal cell, according to the Insurance Regulatory and Development Authority of India (IRDAI). If the claim takes too much time, beyond a "reasonable period" (30 days, as a rule) or is refused unnecessarily, you can submit a written complaint to them. Make sure that you note the reference number of the complaint — this will be useful if you want to pursue the matter further.

Escalate to the IRDAI and Ombudsman

If the grievance cell doesn’t respond within 15 days, or if you’re unsatisfied with the reply, you can approach IRDAI’s grievance redressal system, IGMS (Integrated Grievance Management System). You can file complaints online through the IGMS portal. Beyond that, the Insurance Ombudsman is your next step — this is a free, quasi-judicial authority specifically set up to handle consumer disputes in insurance. The Ombudsman covers disputes up to ₹30 lakh, and insurers must comply with its rulings.

Use timelines to your advantage

Insurers cannot sit on claims indefinitely. For health insurance, IRDAI mandates that all claims be processed within 30 days of receiving documents. For motor insurance, surveyor reports must be submitted within 30 days, and settlement within another 30 days. If the insurer misses these deadlines, you are entitled to interest on the claim amount from the date of delay. This is a right few policyholders know about.

Keep your paperwork clean

While rights are on your side, the reality is that insurers look for technical grounds to delay or deny. Always keep copies of medical reports, discharge summaries, bills, and communication with the insurer. Submit documents in writing or through the official portal so there’s a record. In motor or travel claims, file police reports or FIRs where required. The stronger your documentation, the weaker the insurer’s excuses.

When to consider legal action

If the Ombudsman route fails or your claim amount is very high, you can approach consumer courts or civil courts. Many consumers have won large cases against insurers for arbitrary claim denials. Courts have consistently held that ambiguous policy wordings must be interpreted in favour of the policyholder. Legal action can take time, but it’s a powerful tool if your claim is significant.

Why awareness is your best weapon

Insurance companies count on most people giving up after a rejection. But IRDAI rules are designed to protect you. Knowing that you can demand written reasons for rejection, escalate to an Ombudsman, and even claim interest on delayed payouts shifts the balance of power. Once you understand these levers, you’ll approach claims with more confidence.

FAQs

1. Can insurers reject a claim for late intimation?

They can, but only if the delay affects claim investigation. IRDAI guidelines state that minor delays in informing the insurer should not be grounds for rejection if the claim is genuine.

2. What if my insurer keeps asking for documents one by one to delay things?

You can escalate. IRDAI requires insurers to specify all required documents at once, not in a piecemeal manner that drags the process.

3. Do I need a lawyer for the Insurance Ombudsman?

No, the Ombudsman process is designed to be consumer-friendly and free of cost. You don’t need a lawyer, though you should prepare your documents well.