Missing a deadline while filing a health insurance claim has often meant losing out on money. But a recent ruling by the Bombay High Court may change that for many policyholders. The court has made it clear that a genuine claim cannot be rejected simply because it was filed late, reported The Economic Times.
The Bombay High Court said that insurance companies cannot deny hospitalisation claims only on the ground that they were submitted after the time limit mentioned in the policy. The court held that such restrictions cannot override a policyholder’s right to receive benefits they are otherwise entitled to.
A bench of Justices Bharati Dangre and Manjusha Deshpande passed the order on April 20. It directed the insurer to reimburse the claim amount within eight weeks, along with 6% annual interest from the date the payment became due.
According to the report, the matter came up after CP Ravindranath Menon filed a petition seeking reimbursement for medical expenses. He was covered under a group health insurance policy provided through his employer, Export-Import Bank of India.
The policy was valid from April 2021 to March 2022. Menon submitted claims in May 2022 for expenses incurred during the policy period. However, the insurance company rejected a claim worth 1.13 lakh, saying it was filed beyond the 90-day limit specified in the policy.
The insurer argued that since the policy clearly mentioned this deadline, the claim was not valid.
The court did not accept this reasoning. It observed that such time-limit clauses restrict the policyholder’s ability to access benefits that they are otherwise eligible for.
In its observation, the court said that these kinds of conditions cannot be sustained in law and must be treated as void. In simple terms, the court made it clear that a delay alone cannot be used as a reason to deny a rightful claim.
It directed the insurer to reimburse the claim amount within eight weeks, along with 6% annual interest from the date the payment became due.
Legal experts believe this judgment could have a wider impact on the insurance sector.
They say the ruling makes it clear that insurers cannot reject valid claims merely due to procedural delays. The court has treated such time-limit clauses as invalid under Section 28(b) of the Indian Contract Act. Moreover, they see this as a significant shift, noting that companies can no longer rely on technical conditions to deny genuine claims. Instead, the focus should be on whether the claim itself is valid and justified.
For policyholders, this decision offers a sense of relief. Many people have faced claim rejections simply because they missed a filing deadline, even when their expenses were genuine.
While it is still advisable to file claims on time, the ruling strengthens the position of policyholders in case of delays. It also puts pressure on insurers to review their practices and ensure that valid claims are not turned down on technical grounds.
Overall, the judgment is expected to bring more fairness to the claims process and reduce disputes between insurers and customers.