'Mere presence of alcohol...': Kerala HC on health insurance; Here’s how to choose right health policy
The ruling came in the case of K.S. Shibu, a Kerala government employee who died in a 2009 road accident. His insurer, National Insurance Co. Ltd, had denied the claim under a clause excluding deaths “under the influence of liquor.”
- Oct 7, 2025,
- Updated Oct 7, 2025 9:01 PM IST
In a landmark judgment, the Kerala High Court has ruled that insurance companies cannot reject accident-related claims merely because the driver had alcohol in their blood at the time of the incident. The court clarified that insurers must prove actual intoxication or impairment of faculties to deny compensation.
“The mere presence of alcohol is insufficient to exclude the insurer from liability,” the court stated.
The ruling came in the case of K.S. Shibu, a Kerala government employee who died in a 2009 road accident. His insurer, National Insurance Co. Ltd, had denied the claim under a clause excluding deaths “under the influence of liquor.”
Upholding the Insurance Ombudsman’s decision favoring Shibu’s widow, the court directed payment of Rs 7 lakh compensation, setting a precedent that strengthens consumer rights in motor insurance disputes. This development was first reported by the Economic Times.
Selecting the right health insurance policy
Selecting the right health insurance policy requires careful analysis of key parameters to ensure adequate coverage and avoid costly disputes. Among the most significant aspects are claim settlement ratio, incurred claim ratio, and the implications of deductibles and co-payment clauses. Understanding these factors helps buyers anticipate out-of-pocket costs and make informed decisions. Policy conditions such as room rent limits and exclusions differ between insurers, impacting reimbursement. Reviewing policy documents and network hospital lists helps consumers reduce financial stress during emergencies. The following sections explain these factors with recent data and expert guidance for first-time buyers.
Incurred Claim Ratio (ICR)
The incurred claim ratio (ICR) reflects how much an insurer pays in claims compared to premiums collected. For 2023-24, companies like Reliance General Insurance and Go Digit General Insurance report ICRs of 89.42% and 93.87%, while Aditya Birla Health Insurance stands at 68.31%. Experts recommend an ICR between 70% and 90% for a healthy balance between claims paid and premium income.
Claim Settlement Ratio (CSR)
The claim settlement ratio (CSR) measures the proportion of claims settled versus those filed. In 2023-24, Navi General Insurance recorded a CSR of 99.97%, Acko General Insurance 99.91%, and Reliance General Insurance 99.57%. High ratios indicate an insurer’s reliability in settling claims, which is crucial for policyholder trust.
Deductibles and co-payment
Deductibles and co-payment clauses affect the amount policyholders must pay before insurance benefits apply. For example, with a Rs 50,000 deductible on a Rs 10 lakh policy, the insurer covers costs above this threshold. Co-payment requires the insured to pay a fixed percentage of each claim, such as 20%, reducing premiums but increasing out-of-pocket costs. Opting for higher deductibles or co-pay can lower premiums, but buyers should assess their financial readiness for these expenses.
Policy exclusions and conditions
Policy exclusions and conditions define what is not covered. Common exclusions include pre-existing diseases, OPD treatments, cosmetic surgery, and adventure sports injuries. As exclusions differ across policies, reviewing documentation before purchase is essential to avoid unexpected expenses and ensure the policy meets your needs.
Pre- and post-hospitalisation coverage
Coverage for pre- and post-hospitalisation expenses varies. Many insurers cover diagnostic tests or follow-up treatments for 30-60 days before, and 60-180 days after hospitalisation. Experts recommend checking for longer coverage periods to reduce financial burden and ensure follow-up care is included.
Room rent limits
Room rent limits affect reimbursement. For a Rs 10 lakh policy with a 1% room rent limit, the insurer covers up to Rs 10,000 per day. Choosing a more expensive room can lead to proportionate deductions, impacting related costs such as ICU and nursing charges, and increasing your share of expenses.
Waiting period
Most policies have waiting periods for pre-existing diseases, typically one to three years. Initial waiting periods, often 30 days, also apply. Experts suggest choosing policies with shorter waiting periods for pre-existing diseases to avoid claim rejections.
Network hospitals and cashless facility
A wide network of cashless hospitals allows policyholders to avoid upfront payments during hospitalisation. Checking the insurer’s list of network hospitals in your area is important for timely and quality care. The cashless facility differs from reimbursement claims, which may cause delays and financial strain.
In a landmark judgment, the Kerala High Court has ruled that insurance companies cannot reject accident-related claims merely because the driver had alcohol in their blood at the time of the incident. The court clarified that insurers must prove actual intoxication or impairment of faculties to deny compensation.
“The mere presence of alcohol is insufficient to exclude the insurer from liability,” the court stated.
The ruling came in the case of K.S. Shibu, a Kerala government employee who died in a 2009 road accident. His insurer, National Insurance Co. Ltd, had denied the claim under a clause excluding deaths “under the influence of liquor.”
Upholding the Insurance Ombudsman’s decision favoring Shibu’s widow, the court directed payment of Rs 7 lakh compensation, setting a precedent that strengthens consumer rights in motor insurance disputes. This development was first reported by the Economic Times.
Selecting the right health insurance policy
Selecting the right health insurance policy requires careful analysis of key parameters to ensure adequate coverage and avoid costly disputes. Among the most significant aspects are claim settlement ratio, incurred claim ratio, and the implications of deductibles and co-payment clauses. Understanding these factors helps buyers anticipate out-of-pocket costs and make informed decisions. Policy conditions such as room rent limits and exclusions differ between insurers, impacting reimbursement. Reviewing policy documents and network hospital lists helps consumers reduce financial stress during emergencies. The following sections explain these factors with recent data and expert guidance for first-time buyers.
Incurred Claim Ratio (ICR)
The incurred claim ratio (ICR) reflects how much an insurer pays in claims compared to premiums collected. For 2023-24, companies like Reliance General Insurance and Go Digit General Insurance report ICRs of 89.42% and 93.87%, while Aditya Birla Health Insurance stands at 68.31%. Experts recommend an ICR between 70% and 90% for a healthy balance between claims paid and premium income.
Claim Settlement Ratio (CSR)
The claim settlement ratio (CSR) measures the proportion of claims settled versus those filed. In 2023-24, Navi General Insurance recorded a CSR of 99.97%, Acko General Insurance 99.91%, and Reliance General Insurance 99.57%. High ratios indicate an insurer’s reliability in settling claims, which is crucial for policyholder trust.
Deductibles and co-payment
Deductibles and co-payment clauses affect the amount policyholders must pay before insurance benefits apply. For example, with a Rs 50,000 deductible on a Rs 10 lakh policy, the insurer covers costs above this threshold. Co-payment requires the insured to pay a fixed percentage of each claim, such as 20%, reducing premiums but increasing out-of-pocket costs. Opting for higher deductibles or co-pay can lower premiums, but buyers should assess their financial readiness for these expenses.
Policy exclusions and conditions
Policy exclusions and conditions define what is not covered. Common exclusions include pre-existing diseases, OPD treatments, cosmetic surgery, and adventure sports injuries. As exclusions differ across policies, reviewing documentation before purchase is essential to avoid unexpected expenses and ensure the policy meets your needs.
Pre- and post-hospitalisation coverage
Coverage for pre- and post-hospitalisation expenses varies. Many insurers cover diagnostic tests or follow-up treatments for 30-60 days before, and 60-180 days after hospitalisation. Experts recommend checking for longer coverage periods to reduce financial burden and ensure follow-up care is included.
Room rent limits
Room rent limits affect reimbursement. For a Rs 10 lakh policy with a 1% room rent limit, the insurer covers up to Rs 10,000 per day. Choosing a more expensive room can lead to proportionate deductions, impacting related costs such as ICU and nursing charges, and increasing your share of expenses.
Waiting period
Most policies have waiting periods for pre-existing diseases, typically one to three years. Initial waiting periods, often 30 days, also apply. Experts suggest choosing policies with shorter waiting periods for pre-existing diseases to avoid claim rejections.
Network hospitals and cashless facility
A wide network of cashless hospitals allows policyholders to avoid upfront payments during hospitalisation. Checking the insurer’s list of network hospitals in your area is important for timely and quality care. The cashless facility differs from reimbursement claims, which may cause delays and financial strain.