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Unconventional Insurance claims rejections and how to tackle them

04-Mar-2023

The practice of securing health, life, automobile, wealth etc. through respective insurance policies has become imperative in contemporary times of rampant financial uncertainties. Insurance policies have become an integral part of everyone’s overall security in the current era. The well-devised insurance policies are beneficial to all individuals who aspire to protect their family, assets, property and themselves from unforeseen and unpredictable financial risks or losses. Insurance plans potentially assist people with the payments for medical emergencies, hospitalisation, and treatment of specific medical conditions along with medical care required in the future.

It is crucial to understand that the procedure of processing and disbursing the insurance claim amount is volatile as it depends on various significant terms and conditions. The procedure for filing insurance claims has become comparatively challenging in the last few years. Notably, there has been a significant rise in insurance claims of unconventional nature. Consequently, it sometimes becomes tough for insurance companies to make appropriate settlements and identify potential fraud faster since unique variables and data impact the settlement process.

Various insurtech companies are concentrating on enhancing the claims process, thereby, enabling insurance carriers to interact with consumers efficiently. Sufficient knowledge about diverse insurance claims and their appropriate solutions is the best way to process grievances related to insurance policies of unconventional nature.

Delay and Short Settlement

It has been noted in recent times that some insurance claims get rejected due to several factors like inadequate information furnished, unavailability of clarity on the settlement amount etc. One such scenario is the delay in the settlement of the ‘Hospitalisation Claim’. In such cases, the claim redressal firms follow the path of effective communication with concerned authorities. Claim settlement platforms write to the concerned carrier explaining the inordinate delay in settlement. Integrated Grievance Management System (IGMS) registers the complaint online. The policyholders are requested to provide the proper information required. After approximately 15 days of the information being submitted, the company settles the claim but partially. Once again, the mail regarding the remaining settlement amount is forwarded to the Grievance Redressal Officer, Integrated Grievance Management System re-registers the complaint, and the final settlements for the pending amount are also cleared. Such cases are resolved approximately within 10 days.

Rejection of Claim

Non-Submission of the relevant documents can be one of the major reasons for the claim rejection. In such circumstances, the claims settlement companies write to the Grievance Redressal Officer (GRO) of the concerned insurance company. Such complaints are registered online at the Integrated Grievance Management System (IGMS). The policyholder is requested to provide the missing information and sometimes, cases of the stated nature are often allocated to the Ombudsman for further action, where the insurance carrier has raised some information-centric requirements. Such cases are quintessentially resolved under the stipulated period of 1.5 months.

Insurance mis-selling cases

The incidents of insurance claims being rejected due to fraud, misrepresentation or mis-selling are on rife these days. Insurance redressal platforms resolve such cases tactfully with the assistance of evidence. Policyholders are asked to furnish pieces of proof like call recordings and WhatsApp Chats etc. to corroborate the fraudulent mis-selling of the policy. Redressal platforms write to the Grievance Redressal Officer of the concerned insurance companies. It must be noted that some insurance carriers straight away refund the money, however, some may refuse to do the same. In such circumstances, the claims settlement platforms raise complaints to the Ombudsman. It has been observed that almost all insurance carriers refund the complete amount as per the Ombudsman directives. Such cases are typically resolved within a period of 4 months.

‘Act of God’ clause in insurance policies

The term “Act of God” is used by insurance companies to describe the harm inflicted by events beyond human control. Any natural disaster, accident, or occurrence that could not have been avoided by smart planning or diligence falls under the mentioned insurance clause. For instance, natural calamities like hurricanes, wildfires, earthquakes, windstorms, lightning strikes etc. fall under the Act of God category of claims. However, the specific definition of the stated clause changes as per the insurance company. This scenario can invariably cause confusion which may lead to a lack of clarity for the insurance redressal platforms while raising related claims. Since many insurance companies do not cover the losses brought on by natural disasters, it is important to implement wise measures to process claims. It is thus advisable for the redressal platforms to review the circumstances covered and excluded for the policies that fall under the Act of God category. Comprehensive auto insurance typically includes coverage for the damages that occurred due to natural disasters. It is highly recommended that people must purchase supplementary insurance policies that provide compensation for the damages caused by potential natural calamities, which are otherwise denied by the majority of insurance companies under the Act of God clause.

Insurance for Aesthetic/Cosmetic procedures

Cosmetic/ Aesthetic surgery has gained extreme popularity in recent times. Since cosmetic procedures are generally expensive, the majority of health insurance policies do not pay for the same. As aesthetic procedures are not deemed necessary to preserve the quality of life or crucial to the proper functioning of vital organs, insurance providers generally do not pay for such treatments. However, people can upgrade their current health insurance plan to cover cosmetic and aesthetic surgeries as long as the provider offers coverage against the mentioned procedures.

Insurance policies are imperative to one’s overall security and can render maximum benefits if chosen with diligence.

Source : Financial Express

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