Claim repudiation and claim rejection are two different processes that are related to the insurance industry. In India, they are regulated by the Insurance Regulatory and Development Authority of India (IRDAI).
Claim repudiation is a process in which an insurance company denies a claim based on certain reasons, which could include invalid or fraudulent documentation, policy exclusions or loss to some other cause outside the scope of the policy. For example, if a customer files a claim for theft but all evidence indicates it was an act of vandalism instead, then the insurer can repudiate the claim.
Claim rejection is slightly different from repudiation in that it occurs when there is a valid claim made, but it simply does not fit within the terms of coverage outlined in the policy. For instance, if someone with health insurance tries to file a claim for something not covered in their policy such as elective cosmetic surgery or fertility treatments, then an insurer can reject such claims.
Report on repudiation and rejections
In India, as per the report on 31 March 2022 published by IRDAI, the death claim repudiation and rejection is as follows:
In the year 2021-22, there were a total of 12609 death claims worth Rs.1099.12 crores repudiated and a total number of 3900 death claims worth Rs.192.45 crores rejected by the insurance industry.
FAQs Related To Claim Repudiation vs Rejection:
1. What is the difference between claim repudiation and rejection?
Answer: The main difference between these two processes is that repudiation involves denying a valid but invalidly filed claim whereas rejection involves denying valid claims due to lack of coverage under specific policies.
2. Do I have any recourse after my claim has been rejected or repudiated?
Answer: Yes. After your claim has been rejected or repudiated you have the right to raise a dispute with your insurer and appeal for reconsideration using additional evidence if available. If unsuccessful you may take legal action against your insurer for damages or losses caused due to negligence on their behalf.
3. Can I get my premiums refunded after my claim has been denied?
Answer: No, once your premium payment has been accepted by your insurer you won’t be eligible for refunds even if your claims are subsequently denied due to any reason including non-coverage by the policy or invalidity/fraudulent documentation furnished at time of filing claims.
4. How can I prevent my claims from being rejected / repudiated?
Answer: To reduce chances of denial ensure that all documents submitted in support of your claims are valid and genuine , and also check throughly before signing up for any insurance plan , what it covers and what it excludes . At times riders may be offered as add-on coverages enabling wider coverage , these should also be reviewed before investing.
5. Can I transfer my insurance policy from one company to another after my previous one got rejected?
Answer : Yes , it is possible as IRDAI offers portability options through which customers can switch their policies from one insurer to another without losing out on benefits accrued under earlier plans. However this option may not be feasible for those who had their policies previously rejected.