Care Health Insurance Ordered to Pay $90,000 to Haryana Woman Over Travel Claim
Care Health Insurance has been ordered to pay $90,000 after a Haryana consumer commission rejected its decision to limit a woman’s travel insurance claim.
Care Health Insurance has been ordered to pay $90,000 to a Haryana woman after a consumer commission ruled against limiting her US heart treatment claim to 10%.
Care Health Insurance: A district consumer commission in Haryana has directed Care Health Insurance to pay the remaining $90,000 under a travel insurance policy to a 73-year-old woman who underwent emergency heart treatment in the United States, holding that the insurer could not restrict the claim to 10% by citing her pre-existing diabetes.
The commission also directed the insurer to pay ₹1 lakh as compensation for mental agony and harassment and ₹22,000 towards litigation expenses. The order was passed on August 25, 2026.
The commission said the insurer had been informed about the woman’s diabetes when the travel insurance policy was purchased and had accepted the risk, charged the applicable premium and issued coverage for the full sum insured without any specific exclusion or endorsement restricting cardiac treatment.
Care Health Insurance: Woman’s travel insurance claim was cut to $9,900
According to the commission’s order, the woman and her husband had purchased a travel insurance policy for their trip to the US from March 1 to April 30, 2022.
The policy carried a sum insured of $100,000, while the couple paid a premium of ₹30,494.
The woman had disclosed that she was diabetic at the time of purchasing the policy. The insurer subsequently issued the policy after accepting the disclosed medical condition.
On March 19, 2022, while in the US, she developed serious cardiac problems and was admitted to a hospital in Texas. She was diagnosed with acute heart failure and a heart attack and underwent angioplasty.
She remained in hospital for four days and was discharged on March 23, 2022.
The hospital raised a bill of $145,838.25 for the treatment. However, the insurer paid only $9,900, equivalent to 10% of the policy’s $100,000 sum insured.
The insurer attributed the limitation to the woman’s pre-existing diabetes, treating the cardiac treatment as related to the disclosed condition.
The woman subsequently sought an explanation from the insurer over the reduced settlement. According to the commission, the insurer did not provide the relevant documents or clearly identify the policy provision that permitted it to restrict the payment to 10%.
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Care Health Insurance: Commission rejects insurer’s pre-existing disease argument
The insurer argued before the consumer commission that the policy permitted payment of only 10% of the insured amount because the treatment was connected with a pre-existing disease.
It also challenged the maintainability of the consumer complaint, arguing that the woman had previously approached the Insurance Ombudsman.
The commission rejected both arguments.
It noted that the Insurance Ombudsman had not adjudicated the dispute on its merits. Instead, the woman’s complaint had been dismissed because the amount involved exceeded the Ombudsman’s financial jurisdiction limit of ₹30 lakh.
The commission therefore held that the woman was entitled to approach the consumer forum.
Care Health Insurance: Diabetes was disclosed before policy issuance
A key issue before the commission was whether the insurer could rely on diabetes to reduce the claim after being informed about the condition before issuing the policy.
The commission found that the woman had disclosed her diabetes at the time of taking the policy and that the insurer had accepted the risk and charged the premium accordingly.
The bench comprising President Jaswant Singh and members Neeru Agatwal and Sarvjeet Kaur said the insurer had issued the policy for the full $100,000 sum insured without placing an endorsement limiting coverage for cardiac events.
The commission held that the insurer could not subsequently rely on the same disclosed condition to reduce its liability when the claim was made.
It said that once the insurer had accepted and priced the disclosed pre-existing disease into the policy, it could not unilaterally reduce the claim at the time of settlement without establishing a contractual basis for doing so.
Care Health Insurance: No medical evidence linking diabetes to heart attack
The commission also examined the medical evidence produced in the case.
It found that the insurer had not produced medical evidence establishing that diabetes was responsible for the heart attack suffered by the woman.
The treating cardiologist had stated that the woman had no previous history of coronary artery disease and that it could not be conclusively established that diabetes was responsible for the heart attack.
The commission therefore found that the insurer’s reliance on diabetes alone was insufficient to establish that the cardiac treatment fell within a restricted pre-existing disease coverage provision.
The commission observed that an insurer cannot deny or restrict a claim merely by pointing to a pre-existing illness when there is no evidence establishing a connection between that illness and the medical condition for which treatment was received.
Care Health Insurance: Commission finds deficiency in service
The consumer commission held that limiting the payment to $9,900 amounted to deficiency in service and an unfair trade practice.
It found that the claim had effectively been restricted on a technical ground without sufficient evidence supporting the insurer’s decision.
The commission directed Care Health Insurance to pay the remaining $90,000 in Indian rupee equivalent, along with interest at 9% per annum from March 23, 2022, the date on which the remaining claim amount was denied.
In addition, the insurer was ordered to pay ₹1 lakh towards mental agony and harassment suffered by the complainant and ₹22,000 towards litigation expenses.
Care Health Insurance: Insurer given 45 days to comply
The commission directed the insurer to comply with the order within 45 days of receiving a copy of the order.
It further said that if the awarded amount was not paid within the stipulated period, the applicable interest rate would increase to 12% per annum.
The ruling effectively requires the insurer to pay the balance of the policy’s $100,000 sum insured, subject to conversion into Indian currency, rather than the $9,900 that had initially been paid.
Care Health Insurance: What the Haryana consumer commission ruled
- Policy sum insured: $100,000
- Premium paid: ₹30,494
- Hospital bill: $145,838.25
- Amount initially paid: $9,900
- Balance ordered to be paid: $90,000
- Interest: 9% annually from March 23, 2022
- Mental agony compensation: ₹1 lakh
- Litigation costs: ₹22,000
- Compliance period: 45 days
- Interest if payment is delayed: 12% annually
The order underscores the commission’s finding that the insurer had accepted the woman’s disclosed diabetes when the travel policy was issued and had not established through medical evidence or a clearly identified policy provision that the condition justified limiting the subsequent cardiac treatment claim.
