Why Insurance Claims Get Rejected
Claims can be denied due to:
- Non-disclosure of medical history or material facts.
- Policy lapse or non-payment of premiums.
- Delayed intimation or missing documentation.
- Violation of policy terms or exclusions.
- Fraudulent claims or misrepresentation.
Insurance claims may be rejected for several reasons, many of which can be avoided with proper care and timely action. Understanding these causes can help you prevent rejection and build a stronger case if you need to challenge a denial.
Common Reasons for Rejection:
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Non-disclosure of Medical History or Material Facts: If you failed to reveal a pre-existing illness or significant lifestyle habit (like smoking) at the time of taking the policy, the insurer can reject the claim.
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Policy Lapse or Non-Payment of Premiums: If the policy was not active due to missed premiums or a lapse in coverage, claims made during that period are typically invalid.
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Delayed Intimation or Incomplete Documentation: Most insurance providers have strict timelines for notifying them of a claim. Delays or missing papers (like medical bills, discharge summary, or death certificate) often result in rejections.
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Violation of Policy Terms or Exclusions: Every policy has exclusions—situations not covered (e.g., suicide in the first year, participation in dangerous activities). If your claim falls within an excluded clause, it may be denied.
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Fraud or Misrepresentation: Submitting fake documents, inflated bills, or misstated facts can result in outright rejection and even legal action by the insurer.
Your Legal Rights as a Policyholder
- You are entitled to fair, transparent assessment of your claim.
- Insurers must provide written reasons for rejection.
- You have the right to appeal within the company, then externally.
- Rejections must comply with IRDAI norms and Consumer Protection Act.
As a policyholder in India, your rights are protected under both the Insurance Regulatory and Development Authority of India (IRDAI) guidelines and the Consumer Protection Act, 2019. Insurance companies must act in good faith and provide clear, unbiased claim processing.
Key Rights You Have:
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Fair and Transparent Assessment: Insurance companies are legally bound to evaluate your claim fairly, without arbitrary delays or unjustified scrutiny. They must adhere to timelines and service standards set by IRDAI.
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Written Reasons for Rejection: If your claim is denied, the insurer must issue a detailed written explanation citing the specific reason(s) for the rejection. Vague or verbal rejections are not acceptable.
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Right to Appeal: You can:
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First file an appeal or grievance with the insurer’s internal grievance redressal mechanism.
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Escalate the matter to the Insurance Ombudsman, IRDAI, or Consumer Forum if unsatisfied with the insurer's response.
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Regulatory Protection: The IRDAI (Protection of Policyholders’ Interests) Regulations ensure your right to clarity, fairness, and recourse. The Consumer Protection Act allows you to file a complaint for compensation if your claim is unjustly denied or delayed.
Appealing via IRDAI
If unsatisfied with the insurer’s reply, you can:
Approaching Consumer Court
If IRDAI does not help, file a consumer complaint at:
- District Commission: for claims up to ₹50 lakh.
- State Commission: ₹50 lakh to ₹2 crore.
- National Commission: Above ₹2 crore.
Use E-Daakhil to file online. Attach all evidence like claim form, insurer response, medical reports, and communication records.
Quick Tips for Success
- File complaints quickly — ideally within weeks of rejection.
- Stay polite, clear, and focused in documentation.
- Keep all evidence properly labeled and time-stamped.
- Seek legal help if compensation is significant.
Successfully challenging a rejected insurance claim requires a strategic, well-documented approach. These quick tips can improve your chances:
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Act Promptly
Don’t wait too long to respond to a rejection. Ideally, file a formal grievance within 2–3 weeks of receiving the denial. Most insurers have a limited window for internal appeals.
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Be Polite and Professional
Always maintain a respectful and factual tone in emails, complaint forms, or letters. Avoid emotional language — focus on what happened, what was promised, and what you're seeking.
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Organize Your Evidence
Create a clear file of all related documents:
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Policy copy
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Medical reports, if applicable
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Claim forms and correspondence
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SMS or email records
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Screenshots from insurer’s portal/app
Label each file with dates and a short description. Use PDF format for uploads when filing online.
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State Your Case Clearly
Mention important dates (purchase, claim submission, rejection) and clearly explain why the rejection is unfair. Reference the relevant policy clause or IRDAI guideline if possible.
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Know When to Escalate
If you're seeking significant compensation or your case is complex, it’s wise to consult a consumer lawyer or insurance advisor. Legal professionals can help frame your complaint effectively.
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