Insurers can no longer refuse honouring a claim just because the request for a claim came in late. According to recent guidelines issued by the insurance regulator, Insurance Regulatory and Development Authority (Irda), even a late claim should be entertained, especially when the reason for delay is a genuine unavoidable circumstance.
According to the regulator, the insurer’s decisions to reject a claim should be based on sound logic and valid grounds. Rejection of claims on purely technical grounds in a mechanical fashion will result in policyholders losing confidence in the insurance industry, the regulator has said in the notification.
The current norm
Currently, there isn’t a strict time frame within which a claim needs to be reported. For instance, in case of life insurance policies, claims that are even six months late are entertained as long as the insured person has made an honest declaration in the proposal form at the time of buying the policy and all the supporting documents in order to make a claim are in place.
In case of non-life policies, especially health insurance, some insurance companies stipulate a time frame to ease their administrative burden in the event of multiple or frequent claims. These time frames are in place only in order to smoothen the administrative process and to ensure that the insurer gets sufficient time to investigate a claim.
What’s in store
The time frame stipulated by some insurers is also seen as grounds for mechanically rejecting a claim, which seems to have worried the regulator. To tackle this issue, the regulator has said that insurers must not reject a claim unless and until the reasons are specifically ascertained, recorded and the insurers have satisfied themselves that the claims would have been rejected even if reported on time. The regulator has also asked the insurers to insert a clause in the policy document, stating that insurer will honour a delayed claim where the delay is because of reasons beyond the control of the insured person.
What you should do
As long as you are able to give all the supporting documents, a delay shouldn’t worry you anymore. However, we suggest you file your claim in time.
In case the insurer doesn’t honour a late claim, you can approach the regulator through its toll-free number 155255 or through its website, igms.irda.gov.in, where you can register and track your complaint. The regulator will follow up with the insurer on your behalf.