How to fight denied Insurance Claims with the help of Insurance Ombudsman?


Generally whenever insurance claims whether it is life insurance claims or Non life insurance claims are rejected, policy holders directly approach a lawyer and file case at consumer court. What happens is, filling a case in the court is very costly affair because lawyer will charge you his fees as well as expenses for fighting the case and court cases take long processing time in India, so you pay the a higher cost with higher waiting period.

To avoid all the above hurdles Insurance Regulatory Development Authority (IRDA) which is the regulator for insurance sector in India has appointed a separate department which is called Insurance Ombudsman.

What is Insurance Ombudsman?

Insurance ombudsman is a separate department created by the Government of India through a special notification on 11th November, 1998 for quick disposal of grievance of policy holders. The core objective is to protect interest of policy holders and make the grievance redressal smooth and fast so that their confidence in the system remains intact.

How does Insurance Ombudsman work?

Territorial Jurisdictions: The Gov. Body has appointed twelve ombudsmen across the country allotting them different geographical areas of jurisdictions. The ombudsman may hold sitting offices in their geographical areas for smooth disposal of the complaints in their areas. The offices of twelve ombudsman are located at (1) Bhopal (2)Bhubaneswar (3) Cochin(4) Guwahati (5) Chandigarh  (6) New Delhi (7) Chennai (8) Kolkata (9) Ahmedabad (10) Lukhnow (11) Mumbai  (12) Hyderabad.Click here for detailed addresses and contact details of Insurance Ombudsman.

Which type of complaints can be considered by Insurance Ombudsman?

Insurance Ombudsman has powers to entertain complaints on the following aspects in respect of personal line insurances(this means that claims related to non individual entities cannot be resolved by Insurance Ombudsman).

  • Any partial or total repudiation of claims by an insurer. 
  • Any dispute in regard to premium paid or payable in terms of the policy. 
  • Any dispute on the legal construction of the policies in so far as such disputes relate to claims. 
  • Delay in settlement of claims. 
  • Non-issue of any insurance document to customers after receipt of premium.

Insurance Ombudsman can only entertain complains relating to above matter and that too up for claims including expenses not exceeding Rs. 20 Lakhs. This means that insurance ombudsman cannot entertain complaints where claim amount including expenses is above Rs. 20 Lakhs.

How to Lodge the complaint with Insurance Ombudsman?

If you have an Insurance Policy on personal lines (only individual policy holders can approach Insurance Ombudsman for their complaints and people like corporate or partnership firms cannot approach Insurance Ombudsman) and have a grievance against an insurance Company, complaint can be filed by Policyholder or claimant/legal heirs with the insurance ombudsman. For that following process has to be followed by policy holder.

Step -1 Write to Grievance Redressal Officer: First of all, you should write to the Grievance Redressal Officer of the respective insurance company. Policy holder cannot send his complaint directly to the Insurance Ombudsman. Click here for the contact details of the Grievance Redressal offices of different insurance companies.

Grievance Redressal Office should deal with your complaint within a period of 30 days.

Step-2 Write to the Insurance Ombudsman: If policy holder does not receive any revert from the Grievance Redressal Officer within 30 days of making complaint or he is not satisfied with the answer of Grievance Redressal Officer then he can approach the Office of Insurance Ombudsman as per jurisdiction for value of the claim including expenses not exceeding 20 lakhs, within 1 year from date of rejection/repudiation/partial settlement of claim by the Insurer. For jurisdiction please Click here

♦The complaint should be in writing and duly signed by the policy holder/ claimant or legal heirs in a prescribed format . Click here to download the format for the complaint. Also provide the photocopies of the following documents to the office of Insurance Ombudsman for the consideration of the matter.

  • Policy copy ( all pages of policy under which complaint is lodged).
  • Copies of all old policies for covering of Insurance since last 48 months prior to this policy if claim is rejected on grounds of pre-existing diseases/waiting period.
  • Repudiation/Denial letter/Partial settlement letter issued by the Insurance company.
  • Representation to the Grievance Redressal of Insurance Company.
  • Any other correspondence exchanged with Insurance Company & TPA.

Which type of complaints cannot be considered by the Insurance Ombudsman?

Following type of complains cannot be considered to Insurance Ombudsman.

  1. Where insured person has not made a representation to the Grievance Redressal officer of the insurance company.
  2. Where the Insured has not made the complaint within one year from the date of rejection or final replay of the insurance company. This means that complaint should be forwarded to Insurance Ombudsman within one year of such rejection; if insured person fails to do so then he can’t file this complaint to Insurance Ombudsman after one year.
  3. The Insured person has forwarded the complaint before any consumer forum, Consumer court or arbitrator or any other such body. This means once the complaint is forwarded to any other forum or consumer court or any such body it cannot be forwarded to insurance Ombudsman.

On receipt of a complaint Insurance Ombudsman will dispose it of in following manner:

a)Make the Recommendations:

  • When a complaint is received by the Insurance Ombudsman, he may make a recommendation which he thinks is fair considering circumstances of the case.
  • Such recommendations should be made within one month of the receipt of complaint and copies of recommendations should be sent to complainant and insurance company.
  • If complainant is fully satisfied with the recommendations, he has to submit his acceptance in writing to the Insurance Ombudsman office within 15 days of receipt of such recommendations stating that he totally agrees with recommendations made in full and final settlement of claim.
  • On receipt of such acceptance from the complainant, Ombudsman shall send insurance company copy of recommendations along with acceptance letter of complainant. On receipt of such acceptance letter and recommendation, insurance company should within 15 days (from the date of receipt of letter and recommendations) comply with the recommendations and inform the Ombudsman that recommendations are complied with.

b)Pass an Award: Where a complaint is not settled in above manner through recommendations, Ombudsman can pass an award which he thinks fit considering the facts of the case.

  • The award will clearly mention the amount awarded to complainant.
  • Such award is passed within three months of receipt of complaints by the ombudsman. A copy of such award shall be sent to both complainant as well as insured person.
  • On receipt of such copy, the complainant if he agrees to the terms of the award, shall furnish his acceptance letter to the insurer within one month stating that he agrees to the award in full and final settlement of the claim.
  • On receipt of such letter from complainant, the insurer shall within 15 days comply the terms of the award and intimate the compliance to the ombudsman.

What if Policy holder does not accept the award?

  • If the award passed by the Ombudsman is not acceptable to the policy holder he may approach other venues like consumer forums or courts for the settlement of the complaint.

Can insurance company reject to comply with the award passed by the Ombudsman?

  • No, insurance company has to accept the award passed by the insurance Ombudsman.

Does Insurance Ombudsman charge anything?

  • No, the services of Insurance Ombudsman are absolutely free for the policy holders so rather than approaching to consumer forums or courts directly first policy holders should send their complains to the Insurance Ombudsman.

Conclusion : From all above discussion, it is clear that Insurance Ombudsmen is cost effective, easy and less time consuming way of resolving your complaints and getting your rejected claims settled. The working process of Insurance ombudsmen is designed in such a manner that an individual policy holder can easily fight against a giant insurance company for his rights without help of any legal support and he gets solutions quickly. Further, The decision of the Insurance Ombudsmen is binding to insurance company but the policy holder is free to move ahead in Consumer Court or Consumer Forum if he is not satisfied. So by approaching Insurance Ombudsmen, doors of consumer court don’t close down. If policy holder is not satisfied with the judgement of Insurance Ombudsmen they can always move towards other legal venues available. Considering all these provisions my advice to policy holders is that whenever your claim is rejected or you have any other complaints, first move to Grievance Redressal offices of concerned insurance company and if the things are not settled there, then first approach Insurance Ombudsman of your jurisdiction and if after that your matter is not resolved move to other legal venues only. Don’t jump directly to the consumer Court or Consumer Forums.