A repudiation letter is a legal document, and it can be answered
The letter usually runs to three paragraphs. It refers to the policy, states that the claim has been examined, cites a clause, and says the claim is repudiated. Nothing in it explains which fact was found to be untrue, which document was not accepted, or why the clause is said to apply. Policyholders read it as final and either give up or write angry emails that change nothing.
The framework that governs a claim
Four layers apply. The contract is the policy wording, read with the proposal form, the endorsements and any customised benefits. The statute is the Insurance Act, 1938, which contains the pivotal Section 45 on the calling in question of a policy after the expiry of three years, along with provisions on surveyors and on the conduct of insurers. The regulator is IRDAI, acting under the Insurance Regulatory and Development Authority Act, 1999 and the Protection of Policyholders' Interests Regulations, which impose timelines and standards for claim handling. And the remedies are procedural: the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017, the consumer commissions under the Consumer Protection Act, 2019, the civil courts, and for motor claims the Motor Accident Claims Tribunal under the Motor Vehicles Act, 1988.
Why claims are actually rejected
- Non-disclosure in the proposal. A pre-existing condition, a prior hospitalisation, a smoking history or an occupation that the policy treats as hazardous, omitted at proposal stage. This is the single largest category and the one that Section 45 addresses.
- Waiting period. The claim falls within the pre-existing disease waiting period, the initial waiting period for illness, or the specific waiting period for a listed procedure such as hernia, cataract or joint replacement.
- Exclusion clause. The condition is listed as permanently excluded, or falls within a disease-specific exclusion, or the treatment is one the policy treats as not medically necessary.
- Documentation. Discharge summary, investigation reports, pharmacy bills or the indoor case papers are missing, or the hospital has not submitted the claim form correctly.
- Room-rent or sub-limit capping. The claim is not rejected but proportionately reduced, which policyholders often treat as a rejection.
- Delay in intimation. The insurer argues the claim was notified beyond the period in the policy, though a delay caused by hospitalisation is usually condoned.
- For property claims, the surveyor's assessment of loss, under-insurance and the average clause, or an allegation that the peril was not covered.
- For motor claims, an invalid driving licence, driving under the influence, or a breach of a policy condition that the insurer says is fundamental.
The route to take, in order
- Read the policy and the repudiation letter together. Identify the exact clause relied on and the exact fact alleged. If the letter cites no clause, write and ask for the specific ground and the documents relied on. Insurers are expected to give reasons, and a reasons-deficient repudiation is vulnerable.
- Build the medical or loss record. For health claims, obtain the complete hospital file, the treating doctor's certificate linking the treatment to the insured event, and records showing the chronology of the condition. For property claims, the surveyor's report and the photographs. For motor claims, the police papers, the driving licence and the vehicle records.
- Write a representation to the insurer's grievance redressal officer. This is a prerequisite for the Ombudsman route in most cases, and the insurer has a prescribed period to respond. Send it by email and by registered post, and keep the acknowledgement.
- Approach the Insurance Ombudsman. The complaint must be within one year of the insurer's final reply, must relate to a policy issued to an individual, and must be within the monetary limits prescribed under the Ombudsman Rules. There is no fee, no lawyer is required, and the process is documentary.
- Alternatively, file a consumer complaint. A deficiency in service in the settlement of a claim falls squarely within the Consumer Protection Act, 2019. The complaint must be filed within two years of the cause of action, before the District Commission, State Commission or National Commission depending on the value.
- Or file a civil suit. Where the claim is large, the facts are complex, or the relief sought includes damages beyond the policy, a suit for the policy money is available within three years. It is slower but it permits full evidence and interest.
- For motor accident claims, go to the tribunal, not the consumer commission. A claim by an accident victim against the insurer is decided by the Motor Accident Claims Tribunal under Section 166 of the Motor Vehicles Act, 1988, and the insurer is statutorily obliged to satisfy the award in most cases.
The documents that decide the case
- The policy schedule, wording, endorsements and all renewal notices.
- The proposal form, complete with the declarations and the agent's report.
- Premium payment receipts and the bank record of the last payment.
- The claim form and every document submitted with it.
- Discharge summary, indoor case papers, investigation reports, prescriptions and pharmacy bills.
- The repudiation letter, and every email or letter exchanged before it.
- The insurer's grievance redressal reply, and proof of the complaint to the insurer.
- For property claims, the surveyor's report, the fire or police report, and photographs of the loss.
- For motor claims, the FIR, the charge sheet, the driving licence, the registration certificate and the vehicle's fitness documents.
- Proof of the insured's age and identity where the policy term is in issue.
Forum, time and cost compared
| Forum | Monetary limit | Time limit to file | Typical duration and cost |
|---|---|---|---|
| Insurer's internal grievance redressal | None | Immediately after repudiation | A few weeks; no cost beyond correspondence |
| Insurance Ombudsman | Subject to the limit prescribed under the Ombudsman Rules | Within one year of the insurer's final decision | Often three to six months; no filing fee, no lawyer required |
| District Consumer Commission | Up to ₹50 lakh | Two years from the cause of action | Typically one to three years; nominal court fee, professional fee depends on the claim |
| State Consumer Commission | Above ₹50 lakh and up to ₹2 crore | Two years, with appeal within 45 days of an order | Two to four years; higher fee and a 50 per cent pre-deposit on appeal |
| Civil court | No ceiling | Three years | Three years and more; ad valorem court fee on the claim |
| Motor Accident Claims Tribunal | No ceiling | No fixed limitation after the 2019 amendment, but delay is a risk | One to three years; court fee is nominal in most states |
Where the arguments actually turn
On health claims, the battleground is causation. The insurer says the condition existed before the policy; the insured says the symptoms appeared later, or that the condition is a complication of a covered illness. The hospital record is decisive, and a doctor's certificate obtained after the repudiation carries less weight than the admission notes. Where the policy has completed three years, Section 45 closes the non-disclosure argument altogether and the insurer must find a different ground.
On motor claims, the recurring issues are the validity of the driving licence, the distinction between a private and a commercial use of the vehicle, and whether the insurer can contest the claim on merits at all. In third-party claims the insurer's defences are statutorily limited, and an insurer that has not obtained the permission of the tribunal cannot raise all the defences available to the insured.
Kolkata practice
The Insurance Ombudsman for West Bengal sits at Kolkata and covers complaints arising in the state, including the districts. Complaints can be filed online through the common Ombudsman portal or in physical form, and hearings are usually held at the Ombudsman's office. Consumer complaints go before the District Commission having jurisdiction over the insurer's branch or the policyholder's residence, and appeals from there lie to the State Consumer Disputes Redressal Commission at Kolkata and thereafter to the National Commission.
Motor accident claims arising within the city are filed before the Motor Accident Claims Tribunal attached to the City Civil Court at Kolkata, and those arising in the districts before the tribunal in the district where the accident occurred. The Calcutta High Court hears appeals from the tribunal and from the consumer commissions, and it also entertains writ petitions where an insurer acts in clear violation of the policy or of IRDAI directions, though the court generally prefers the statutory remedy.
Is a claim rejected for non-disclosure always final?
No. If the policy has been in force for more than three years, Section 45 of the Insurance Act prevents the insurer from repudiating on that ground. Within three years, the insurer must show that the non-disclosure was material and knowingly false, and must give reasons. Many repudiations fail on the reasons requirement alone.
Do I need a lawyer for the Ombudsman?
No, the process is designed for individuals to use without representation. In practice, a well-drafted complaint with an indexed document set performs better than an oral explanation, and where the amount is substantial or the medical issues are technical, professional drafting is worth the cost.
Can I claim compensation beyond the policy amount?
Before a consumer commission, yes — compensation for mental agony, deficiency in service and litigation costs can be awarded in addition to the sum insured. A civil court can award interest and damages. The Ombudsman's award is generally limited to the claim under the policy, though it can direct the insurer to honour the policy terms.
What if the insurer has paid part of the claim?
Accepting a part payment does not necessarily end the right to dispute the balance, provided the acceptance was not recorded as full and final settlement. Where the discharge voucher says "full and final", the policyholder must show that it was signed under protest or that the insurer applied a deduction without basis. Always record the protest in writing at the time of acceptance.
The repudiation letter should be read by someone who has seen a few hundred of them before deciding whether to accept it. Advocate Panchanand Shaw, at 14 Hare Street, Kolkata 700001, opposite Bankshall Court, advises policyholders on claim repudiation, Ombudsman complaints, consumer proceedings and motor accident claims before the Kolkata tribunals.