Insurance claim rejected: health, motor, life — what to do next

What has probably happened

You made a claim on your insurance policy and the insurer said no — or paid a fraction of what you lost. Perhaps:

• a health claim was rejected as a "pre-existing disease", "not medically necessary", or "within the waiting period";
• a motor claim for damage to your own vehicle was rejected because of the driver's licence, or settled far below the repair bill;
• a life claim after a death was repudiated — refused, with the policy treated as void — because the insurer says something was hidden in the proposal form.

A rejection (insurers often call it repudiation) is a decision, not the end of the matter. Insurance is a service under the Consumer Protection Act, 2019 (Section 2), and a wrong rejection can be a deficiency in service — a failure to provide the service the way the contract requires. The question in almost every case is whether the reason the insurer gives really fits your facts and your policy wording.

For life insurance, the Insurance Act, 1938 adds a firm rule. Under Section 45, a life policy cannot be questioned on any ground after three years from the date of the policy, its revival, or its rider, whichever is later. Within those three years, the insurer can question it for fraud, or for a misstatement or suppression of a fact that is material — one with a direct bearing on the risk — and it must give you the grounds and the material in writing.

What to do, step by step

Day 0 — get the reason in writing. If the insurer told you by phone or app message only, ask for the rejection letter. It should name the reason and the policy clause relied on. Note its date.

Days 1 to 7 — gather the policy and the claim file. You need the full policy document with its schedule and terms, the proposal form you signed, and everything you sent with the claim. For health: the discharge summary, bills, prescriptions and test reports. For motor: the survey report, repair estimate and final bill, photos, and the FIR if there was one. For life: the death certificate, medical records, and any correspondence after the death.

Days 1 to 7 — test the reason against the policy. Read the exact clause. Ask:

• Does the exclusion actually cover what happened? A "pre-existing disease" clause, for example, usually defines what counts as pre-existing.
• For life policies: is the policy more than three years old? If not, was the fact the insurer says you hid really material to the risk, and has it given the grounds in writing?
• For motor: does the survey report match the repair bill? For a loss above an amount set by the regulator, a licensed surveyor's report is required, though the insurer may settle at a different figure (Section 64UM).

Week 2 — complain in writing to the insurer. Write to the insurer's grievance cell (the policy document and the insurer's website give the address). Quote the policy number, claim number and the rejection date; say why the reason is wrong; attach the papers; and ask for the claim to be reviewed and paid. Keep the acknowledgement.

Next — the ombudsman or the Consumer Commission. If the insurer does not put it right:

• The Insurance Ombudsman is a complaint route set up for policyholders. It has its own limits on the kind and size of claim it hears and its own time rules, which this guide does not cover; check them before you choose it.
• The Consumer Commission hears complaints of deficiency in service. You can file in the District Commission where you live or work for gain (Section 34). It hears complaints where what you paid is up to ₹50 lakh, and there is no filing fee when what you paid is up to ₹5 lakh. How the "amount paid" is counted for an insurance policy can be argued, so let an advocate confirm the right level. A legal notice to the insurer before filing is common, though not compulsory.

Within two years — the outer limit. A consumer complaint must be filed within two years of the problem arising (Section 69). A late complaint is admitted only if the Commission accepts you had sufficient cause. Count from the date of the rejection letter, to be safe.

Read what an insurance claim dispute involves for the full procedure.

Timeline and costs

When	What	Who pays
Day 0	Rejection or short settlement received	—
First week	Policy, proposal form and claim file gathered; reason checked	—
Week 2	Written complaint to the insurer's grievance cell	—
After the insurer's reply, or no reply	Ombudsman or Consumer Commission	Commission fee: nil when what you paid is up to ₹5 lakh; the advocate's fee, quoted first
Within two years of the problem	Last date for a consumer complaint, unless the delay is excused	—

Documents to keep handy

• The policy document, with the schedule and all terms and conditions.
• The proposal form you signed, and any medical examination report.
• The claim form and everything sent with it.
• The rejection letter, and any email or message giving reasons.
• Health: discharge summary, bills, prescriptions, test reports.
• Motor: survey report, estimate, final repair bill, photos, FIR if any, and the driving licence and registration certificate.
• Life: death certificate, medical records, the nominee's identity papers.
• Your complaint to the insurer and its acknowledgement.

Mistakes that sink people

• Arguing without the policy wording. The clause decides most cases. Read it before you write anything.
• Signing a "full and final" discharge for a lower amount without understanding that it may be used to close the claim.
• Letting the two years run out while emailing the insurer's call centre.
• Repairing or disposing of the vehicle before the surveyor has seen it.
• Sending incomplete papers, then accepting a rejection for "documents not provided" without sending them.
• Hiding facts in a new proposal form. The best protection is an honest proposal at the start.

When the claim is large or the facts are disputed

If a death claim has been repudiated for "suppression", or a hospital bill runs into lakhs, take advice before you write to the insurer: what you say then can be used later. A 30-minute call with an independent advocate from our panel starts at ₹999.