Claim process and disputes — CFP RMIS

Claim filing and dispute resolution: the test of insurance is when you actually need it. CFPs must guide clients through proper claim filing AND know the dispute resolution channels when claims are wrongfully denied.

Foundation

Claim process basics: 1. Notify insurer immediately (within 24-48 hours typically) 2. File claim form with all documentation 3. Insurer's investigation (if needed) 4. Approval/rejection (typically 30-90 days) 5. Settlement For health claims: • Cashless: hospital pre-authorises, insurer settles directly • Reimbursement: pay yourself, file claim with bills + treatment summary For life claims: • Death certificate, original policy document, claim form • Medical history if natural cause (autopsy reports if available) • Police FIR if accident For motor claims: • FIR (for theft/fire), photos, surveyor inspection • Garage authorisation For property claims: • Surveyor inspection • Photo documentation • FIR for burglary • Repair estimates from authorised contractors

Deep Dive

Documentation discipline = winning claims: Maintain in client file: • Policy schedule + key terms summary • Premium receipts • Claim history (yours and family's) • Pre-existing conditions disclosed at policy purchase • Medical records, prescriptions, hospital records • Property photos + valuations Most claim rejections boil down to: • Pre-existing condition non-disclosure (most common) • Late notification • Inadequate documentation • Claim circumstances not aligned with policy terms • Fraud allegations (rare but devastating) Dispute resolution channels: 1. Insurer's grievance redressal officer (mandatory; 30 days) 2. IRDAI Bima Bharosa portal (igms.irdai.gov.in) • Online grievance system • Insurer must respond in 15 days • Tracking with case number • Free, fast 3. Insurance Ombudsman • Handles disputes up to ₹50 lakh • Quasi-judicial; binding on insurer • Free to consumer • 3-12 month resolution typical 4. Civil court / Consumer court • Higher disputes or complex matters • Slower (years) and costlier • Last resort

Worked example

Worked example — Mrs. Rao's rejected health claim Mrs. Rao, 35, hospitalised for 4 days. Cost ₹2.5L. Policy: ₹10L family floater, 5 years old. Claim filed. Insurer rejection: "Pre-existing thyroid condition not disclosed." Mrs. Rao's response (with CFP's guidance): 1. Pull policy purchase forms; check disclosure: thyroid condition WAS disclosed (Mrs. Rao's prior records). 2. Pull her own medical records: Eltroxin prescription evident from before policy purchase. 3. File grievance with insurer: • Cite policy purchase forms (proof of disclosure) • Cite medical records (substantiating disclosed condition) • Request reconsideration 4. Insurer responds in 30 days: still rejects, citing different reason ("undisclosed obesity-related complications"). 5. Mrs. Rao escalates to Bima Bharosa: • Submits all documentation • Insurer must respond in 15 days • IRDAI investigates internally 6. After 60 days: insurer reverses decision. Pays ₹2.5L claim. Key lessons: • Documentation at policy purchase is critical • Don't accept first rejection if you have evidence • Use formal grievance channels — they work • Bima Bharosa portal effective for many disputes CFPs: educate clients on the process; many give up too quickly.

Real-world scenario

Real-world scenario — Mr. Pillai's fire-claim victory Mr. Pillai's home suffers fire damage. Cost: ₹15L for repairs + ₹3L for damaged contents. Filed claim with home insurer. First response from insurer (after 60 days): • Approves ₹6L for structure (proportional to coverage; he was under-insured) • Denies content claim: "no proof of value" Mr. Pillai's response: 1. He doesn't accept the ₹6L offer for structure • Argument: structure value at fire date was ₹15L. He had cover ₹40L on building (claimed under-insurance applied). • Reality: building cover was ₹40L; his own actual rebuild estimate was ₹15L. Coverage adequate. • CFP files grievance citing this discrepancy. 2. For contents, he provides: • Original purchase invoices (some) • Photos pre-fire showing items • Independent surveyor estimate of damaged items 3. Insurer responds: increases offer to ₹12L total. 4. Mr. Pillai escalates to Insurance Ombudsman. 5. After 8 months: Ombudsman directs insurer to pay ₹17L. Final recovery: 95% of total claim. Without grievance discipline: would have accepted ₹6L (33% of claim). Lesson for clients (and CFPs): • Don't accept first offer if grounds for higher are evident • Documentation at policy purchase + photo records save claims years later • Persistence + escalation: most legitimate claims eventually settle properly

Advanced

Practitioner insight: most claim rejections are recoverable through grievance redressal if: • Insurer's rejection grounds are factually wrong • Documentation supports the claim properly • Process was followed correctly • PED disclosure was honest But: rejections based on legitimate non-disclosure or fraud are typically not recoverable. For CFPs: • Maintain a 'claim playbook' with templated steps for each type • Build relationships with insurer customer service • Document conversations with claim representatives • Use Bima Bharosa as escalation tool — it works • Never abandon a legitimate claim due to insurer pushback For your client base: • Annual review: ensure documentation current, beneficiaries updated, riders aligned • Pre-claim education: understand policy before incident • Post-claim review: lessons learned, policy adjustments needed

Regulatory references

IRDAI grievance regulations
Bima Bharosa portal
Insurance Ombudsman Rules
Consumer Protection Act

Common mistakes & pitfalls

Late claim notification (beyond stipulated period).
Inadequate documentation maintained.
Accepting first rejection without grievance.
Skipping Bima Bharosa or Ombudsman escalation.
Letting claims time-bar by missing deadlines.

Frequently asked

How quickly should I notify insurer of a claim?

Within 24-48 hours typically. For motor: immediately. For health: within 24 hours of admission for cashless. For property: within 7 days standard. Late notification is grounds for rejection in some cases.

What if the insurer rejects my claim?

Don't accept silently. Read rejection reason carefully. If grounds are factually wrong: grievance redressal officer first. If still unsatisfied: Bima Bharosa. If still unsatisfied: Insurance Ombudsman.

Can I claim multiple times in a year?

Yes, until you exhaust the sum insured. Each separate event is its own claim. Some policies have aggregate annual limits; others are per-event.

Practice questions

Click each question to reveal the answer and explanation.

Q 1

For health insurance cashless claim, you should:

(a)Pay yourself first, then claim
(b)Pre-authorise the hospital before discharge
(c)Wait until policy renewal
(d)File claim months later

Correct: (b) Pre-authorise the hospital before discharge

Cashless: hospital pre-authorises with insurer, who settles directly. Pre-authorisation typically within 24-48 hours of admission. Smoother than reimbursement.

Q 2

Most claim rejections occur due to:

(a)Insurer fraud
(b)Pre-existing condition non-disclosure or inadequate documentation
(c)Random reasons
(d)Government rules

Correct: (b) Pre-existing condition non-disclosure or inadequate documentation

PED non-disclosure is most common. Inadequate documentation second most. Honest disclosure + careful documentation prevent most rejections.

Q 3

IRDAI Bima Bharosa is:

(a) A new private insurer
(b)Online grievance redressal portal of IRDAI
(c)A type of insurance product
(d)A premium discount programme

Correct: (b) Online grievance redressal portal of IRDAI

Bima Bharosa = online grievance portal at igms.irdai.gov.in. Insurer must respond in 15 days. Free escalation tool for unhappy customers.

Q 4

Insurance Ombudsman handles disputes up to:

(a)₹5 lakh
(b)₹50 lakh
(c)₹5 crore
(d)Any amount

Correct: (b) ₹50 lakh

Ombudsman jurisdiction: up to ₹50 lakh disputes. Quasi-judicial; binding on insurer. Free, faster than civil court.

Q 5

For a claim rejection citing PED non-disclosure when condition WAS disclosed:

(a)Accept it
(b)Pull policy purchase records to prove disclosure; file grievance
(c)Re-file the claim
(d)Cancel policy

Correct: (b) Pull policy purchase records to prove disclosure; file grievance

If disclosure was made, prove it via policy purchase forms + medical records. File grievance citing evidence. Most such cases reverse on grievance.

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