7 Steps to File a Consumer Case Against an Insurance Company

Introduction

In essence, insurance comes as some sort of guarantee and policyholders who are insulted by their insurance providers through claims denial or delay are well within their rights to demand justice from the law. In India it is governed by consumer protection law which empowers a consumer to approach the court directly against an insurer or reinsurer for offences like rejection of claim, delayed claim settlement or unfair terms of policy. This guide gives a comprehensive description of the laws governing the filing of the consumer case and the procedures that should be followed to present the case.

The laws regarding insurance disputes in India

Before filing a consumer case, it's important to understand the following laws governing insurance disputes in India:

• Insurance Act, 1938: This key law establishes rules of behaviour for insurance organizations, which makes the industry operate fairly and transparently.

• IRDAI Regulations: The Indian Insurance sector regulates with the Insurance Regulatory and Development Authority of India (IRDAI) that formulates the standard of complaint handling and fair dealing and also sets the standard for the procedures with which the Company can resolve complaints.

• Consumer Protection Act, 2019: This legislation also enables consumers to approach consumer courts for disputes related to claim rejection or delay under the title of new consumer rights.

• Public Liability Insurance Act, 1991: This act requires the insurance industry to include liabilities of industries using risky materials so that victims have sources to seek compensation from the industrial accidents.

• The Contract Act, 1872: Oversees insurance policy making and the execution of these policies to ensure that all contracts entered into by an insurer and the insured comply with legal and rational standards.
  
  

Process on How to commence a Consumer Case

Step 1. Always try to approach your complaint to the Insurance Company’s Grievance Redressal System

What to Do: Compose a letter that you would want to write to the management of the company stating your problem (they have denied your claim, delayed, or given you the wrong policy). Remember also to include your policy number, a brief description of the claim and the documents you also wish to enclose.

Timeline: The insurer must decide on the matter within the next fifteen days from the date of the notice. They are supposed to reply under IRDAI’s Consumer Protection Guidelines.

Importance of Documentation: Make sure that you record all the communication as this will help more especially when escalating your complaint.

Step 2. Visit the office of Insurance Ombudsman

When to Approach: In case the insurance company has not addressed the matter within 15 days of receipt of the complaint or the satisfactory disposition may not have been made, make a complaint to the Insurance Ombudsman.

Filing a Complaint: All disputes up to the extent of ₹ 30 lakh are handled by Ombudsman at no cost. In writing the formal grievance, the matter to be addressed should be described, backed up with documents that support the grievance set down, and the relief sought.

How It Works: The Ombudsman seeks to facilitate a compromise between you and the insurer. If no attempt is made to resolve the issue then the two parties will come to a final resolution (judgment).

Outcome Timeline: The usual time the Ombudsman takes to resolve the case is approximately 30 days.

Step 3. Compile Essential Documents

Why This Matters: In a case where you are going to take the case to a consumer court then you will be required to produce all the relevant documents.

Documents Required:

• Copy of the insurance policy and claim forms.

• Copies of all communication with the insurance company.

• Proof of premium payment.

• Insurance Ombudsman’s decision (if approached).

• Any other relevant documents, such as medical reports or accident reports (depending on the nature of the claim).
  
  

Step 4. Jurisdiction and Approach Adopted By the Consumer Forum

Understanding Jurisdiction: Based on the claim amount, the case ought to be filed at the right court as follows:

• District Consumer Disputes Redressal Commission (DCDRC): For claims up to INR 1 crore.

• State Consumer Disputes Redressal Commission (SCDRC): For claims up to INR 1 crore and for claims between ₹ INR crore and INR 10 crore.

• National Consumer Disputes Redressal Commission (NCDRC): In cases where the claims amount exceeds INR 10 crore.

Filing the Complaint: Prepare your complaint statement outlining your grievances and ensure you enclose any supporting documents and papers. It is also necessary to state the relief sought including inter alia the order of reimbursement to the claim amount, compensation for the mental agony suffered or both.

Court Fees: There is a small charge which differs depending on the value of the claim.

Step 5. Report the Case in Consumer Court

Drafting the Complaint: The complaint should state the following:

• The name and address of the complaint and that of the insurance company against which the complaint is made.

• The type of complaint made which could be a denial of a claim, unfair compensation and many others.

• Application for compensation or symbolic relief.

Additional Steps: In addition to the complaint, enclose an affidavit sworn and signed before a notary with respect to the facts. It is also important to make photocopies of all your papers to have more than one copy.

Step 6. Represent Your Case

Attend Hearings: After institution of the case, the court will serve a notice to the insurance company to respond to the matter. Be ready for numerous hearings.

Self-Representation vs. Hiring a Lawyer: You must do it on your own or with the help of an attorney based on how big the dispute is and how much money is at the center of it. While consumer forums allow people to proceed without a lawyer, legal help can certainly build up your argument.

Present Evidence: Produce the relevant documents and describe how the insurer has neglected its responsibilities. Explain why you deserve the compensation being requested in detail.

Step 7. Receive the Court’s Decision

Outcome: If the court rules in your favor, you may receive:

• Compensation for the denied claim.

• Interest on the delayed claim.

• Compensation for mental harassment and litigation costs.

Appeal Option: If the verdict is deemed unfavorable, either party can take an appeal to a higher court within 30 days of passing of the verdict (State or National Commission, as the case may be).

More Information & Legal Resources.

Section 13 of the Consumer Protection Act

• By virtue of the Consumer Protection Act, 2019 one can file a case for any deficiency in service by insurance companies.

• It can also be claimed in respect of other heads of claim such as the amounts persons have spent and or are entitled to for the mental anguish which they suffered because of the delay or denial of the claim.
  
  

Role of IRDAI

If you are facing any problems with the insurer, you can always lodge a complaint to the Insurance Regulatory and Development Authority of India (IRDAI). The Insurance Regulatory and Development Authority of India or IRDAI assists with insurance dispute redressal but it does not have power of consumer courts to award compensation or penalty.

Conclusion

Consumer case filing is a systematic procedure designed to safeguard the insurance policy holders from injustices from their insurers. In the later part of this article, the above mentioned steps can guide you in seeking the right justice and correct compensation or settlement. But do not forget the administrative documents and papers, also ensure the legal side for the maximal security of the consumer rights.

FAQs

What is the period of limitation prescribed for filing a complaint in consumer court?

You are privileged to file a complaint within two years from the date of the cause of action including the denial of your claim.

Is it possible to go to the consumer court without fulfilling the complaint to the Ombudsman?

Yes, it is possible to approach the consumer court all by yourself if you don’t wish to approach the Insurance Ombudsman.

Is there anything such as a limitation as to the amount of compensation that one can demand?

The amount of compensation you may be qualified for depends on the type of loss that you suffered and there are no limitations. But again it has been done in a reasonable manner and would be justified depending on the available evidence.

Is it possible to make an online complaint?

Yes, a majority of these forums provide the convenience of online complaint offices where consumers can report their grievances from.

What if the insurance company disregards the court’s decision?

Defaulting the orders and decisions of the consumer court can attract penalties like fines or imprisonment to officials involved.

If you follow these steps, your rights will be safeguarded and you will be able to take legal action against any misconduct on the part of insurance companies.