Insurance firm must reimburse COVID-19 home treatment costs: Ahmedabad court

In a key ruling, the Ahmedabad Rural District Consumer Disputes Redressal Commission has held that a COVID-19 insurance claim for home quarantine treatment must be honoured by the insurer.

The commission directed Bajaj Allianz General Insurance Co Ltd to reimburse ₹49,824 to a policyholder, along with 8% annual interest, after the insurer had denied the claim for treatment received during home quarantine. 

Commission rules in favour of policyholder

The commission reprimanded the insurer for refusing to cover medical expenses on the grounds that the treatment had taken place at home. It held that even if treatment is received during home quarantine, the insurance company is still liable to reimburse the expenses.

The complainant had purchased a ₹7.5 lakh insurance policy from Bajaj Allianz. Due to the unavailability of hospital beds during the pandemic, the complainant underwent treatment at home at a cost of ₹49,824. The insurer rejected the claim on what the commission described as illogical grounds.

₹49,824 plus interest and compensation awarded

The commission stated that the insurance company’s rejection amounted to serious deficiency in service and constituted unfair trade practice. It held that the company had issued an unreasonable, vague, and illogical order, and added that an insurance firm cannot act in the role of a doctor.

Based on the evidence submitted and the merits of the case, the commission ruled in favour of the complainant. It also directed the insurer to pay an additional ₹5,000 as compensation for mental agony, hardship, and harassment.

Bajaj Allianz found guilty of unfair trade practices

The complainant cited circulars issued by the Insurance Regulatory and Development Authority of India (IRDAI), stating that reimbursement cannot be denied for home treatment under quarantine conditions. The commission accepted this argument while ruling on the claim.

The judgement reinforces the principle that insurers must not reject legitimate claims based on arbitrary interpretations, especially during emergencies such as a public health crisis.