When an insurance claim is rejected, the rejection letter is not the last word. You can ask the insurer to review it, escalate to IRDAI’s Bima Bharosa portal, go to the Insurance Ombudsman for claims up to ₹50 lakh, or file a case before the consumer commission. A civil suit is possible but rarely the right first choice.
The order usually runs like this: insurer’s grievance cell first, then the Ombudsman or the consumer commission. The Ombudsman is free and fast. The consumer commission takes longer but can award more and its orders bind both sides.
Read the rejection letter carefully before you do anything. The reason it gives is the issue you will be arguing about, wherever you go.
Why an insurance claim is rejected
The common reasons given in rejection letters are:
- Non-disclosure of a pre-existing illness or a habit, such as smoking, when the policy was bought
- The illness falls in a waiting period or an exclusion
- Documents missing, or submitted late
- The treatment was not medically necessary, or could have been done as an outpatient
- In motor claims: no valid licence, the vehicle was used commercially, or the damage does not match the story
- In life claims: the insurer says the proposal form was false
Some of these reasons are sound. Many are not. A rejection for non-disclosure is weak if the insurer never asked the question, or if the illness had nothing to do with the claim. For life insurance, Section 45 of the Insurance Act says a policy cannot be questioned on any ground after three years from the date it was issued or revived.
Step 1: Ask the insurer to review
Write to the insurer’s grievance redressal officer. Every insurer lists one on its website and in the policy. State the claim number, the rejection reason, and why it is wrong, with documents. Keep the complaint reference.
Under IRDAI’s 2024 master circular on protection of policyholders, insurers must acknowledge a complaint at once and resolve it within 14 days. Many do not, but the clock matters for the next step.
Step 2: IRDAI Bima Bharosa
If the insurer does not reply, or the reply is unsatisfactory, you can escalate on Bima Bharosa (bimabharosa.irdai.gov.in), IRDAI’s grievance system. You can also call the IRDAI grievance call centre on 155255 or 1800 4254 732, or email complaints@irdai.gov.in.
IRDAI takes up the complaint with the insurer. It does not decide claims or award compensation the way a court does. For a money decision, you need the Ombudsman or the consumer commission.
Step 3: The Insurance Ombudsman
The Insurance Ombudsman is set up under the Insurance Ombudsman Rules, 2017. It handles complaints from individual policyholders against insurers, agents and brokers.
| Point | The rule |
|---|---|
| Limit | Compensation sought up to ₹50 lakh |
| Before filing | You must first complain to the insurer, and either get a rejection or no reply within a month |
| Time limit | Within one year of the insurer’s rejection, or of the end of that one month |
| Fee | None |
| Filing | Online on cioins.co.in, or in writing to the office |
| Not allowed | If the same dispute is already before a court, consumer commission or arbitrator |
The Bengaluru office of the Insurance Ombudsman is in the Jeevan Soudha building, 24th Main Road, JP Nagar 1st Phase. Check the current address and email on cioins.co.in before you send papers.
The Ombudsman first tries to settle the dispute. If that fails, it passes an award. The award binds the insurer, which must comply within 30 days, but it does not bind you. If you are not satisfied, you can still go to the consumer commission.
Step 4: The consumer commission
A rejected claim is a “deficiency in service” under the Consumer Protection Act, 2019. You can file a consumer complaint without going to the Ombudsman first.
For insurance, the level of commission depends on the premium you paid, not the claim amount. That means even a large claim is usually heard by a District Commission. Filing is online on e-Jagriti. The fee is nil where the premium paid is ₹5 lakh or less. You have two years from the rejection to file. See our guide to the consumer court in Bengaluru for the full process.
The commission can order the claim amount, interest, compensation for harassment, and costs. Cases take longer than the Ombudsman, often more than a year, but they suit disputes where the insurer is likely to fight hard or the amount is above ₹50 lakh.
Ombudsman or consumer court: how to choose
| Ombudsman | Consumer commission | |
|---|---|---|
| Cost | Free | Fee by premium band, often nil |
| Speed | Usually faster | Often a year or more |
| Limit | ₹50 lakh | No upper limit for claims |
| Binding | On the insurer only | On both sides, with appeals |
| Lawyer needed | No | Optional, often useful |
For a simple health claim rejection of a few lakh, the Ombudsman is often the sensible first choice. For a disputed life claim, a large motor own-damage claim, or a case with strong evidence of bad faith, the consumer commission is often better.
When a civil suit makes sense
A civil suit before the City Civil Court is slower and needs court fee on the amount claimed. It is used mainly where the dispute is not a consumer dispute, such as a claim by a company under a commercial policy, or where complex fraud allegations need full trial evidence. For most individuals, the consumer commission does the same job more cheaply. Our page for a civil lawyer in Bangalore covers suits generally.
If the claim is about a road accident injury to a third party, it goes to the MACT, not the Ombudsman. See our guide to motor accident claims.
Questions people ask
What can I do if my health insurance claim is rejected?
Write to the insurer’s grievance officer first. If that fails within 14 days, escalate on Bima Bharosa, and then go to the Insurance Ombudsman (for up to ₹50 lakh) or the consumer commission.
Is there a fee to approach the Insurance Ombudsman?
No. The Ombudsman does not charge any fee, and you do not need a lawyer.
What is the time limit to complain to the Insurance Ombudsman?
One year from the insurer’s rejection, or one year from the end of the month the insurer had to reply, if it did not reply.
Can I go to consumer court after the Ombudsman’s decision?
Yes. The Ombudsman’s award binds the insurer but not you. If you do not accept it, you can file a consumer complaint, within the limitation period.
Can an insurer reject a life insurance claim after three years?
Under Section 45 of the Insurance Act, a life policy cannot be called in question on any ground after three years from the date of issue or revival.
Talk to us about your matter
Call or WhatsApp to fix a time. Bring your papers to the office in Rajarajeshwari Nagar.
This article is general information about the law as it stood when it was written. Your facts change the answer. Speak to an advocate before you act on it.