The insurers had sold short-term COVID-specific policies -- Corona Kavach and Corona Rakshak -- in bulk last year as awareness around medical insurance prompted many to cover themselves against COVID-19. The low premium, as specified by insurance regulator IRDA, made these policies affordable for many.
So far so good. Now that the COVID-19 second wave has triggered a huge surge in claims, rejections are no less, especially of COVID-specific policies. "Trends of claim settlements are still not clear but initial indications are alarming with less than 50 per cent claims being settled. It seems insurance companies are not ready for such large influx of cases. They are looking at COVID-specific policies from the rejection point of view," says Shailesh Kumar, Insurance Head & Co-Founder, Insurance Samadhan.
Moreover, they are rejecting renewal even as the regulator has told insurers to offer and renew these policies up to September 30. "The Authority is in receipt of complaints stating that some of the insurance companies are not issuing Corona Kavach and Corona Rakshak policies. In this regard, it is clarified that all general and health insurers are mandated to offer Corona Kavach policy," the regulator says in a circular issued on May 10.
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Note that selling and renewing Corona Kavach policy is mandatory for all insurers. Doing this for Corona Rakshak is optional. Before we move to the reasons for claims rejection, let's understand the key difference between the two policies.
The Corona Kavach policy is an indemnity-based insurance, that is, it covers you only for the loss happened. The insurer will reimburse you for medical expenses up to the sum insured limit subject to terms and conditions. The minimum hospitalisation required is for 24 hours.
The Corona Rakshak is a fixed benefit plan where 100 per cent sum insured is paid to the policyholder if he/she gets hospitalised for a minimum continuous period of 72 hours.
Here is why claims are being rejected:
Mild COVID-19 symptoms - There are cases in which insurers are saying that hospitalisation was not needed because CT value in RT-PCR report is on the higher side. "Who will decide whether 72-hour admission was advisable or patient should have been treated at home? Can insurance companies conclude the severity of COVID-19 and the need for hospitalisation on the basis of CT value? Most Corona Rakshak claims are getting rejected on assumption that patient did not need hospitalisation," says Kumar.
Comorbidity - Comorbidities mean one or more additional illnesses along with the COVID-19. Comorbidities are covered in Corona Rakshak policies, but the insurers are denying it.
"If an illness occurs due to a pre-existing ailment such as hypertension or heart-attack, the insured may suffer rejection as these other illnesses are not related to COVID-19. Corona Kavach as such was a cover that was there to cover only COVID-related treatment. Suffering a heart attack because of COVID or it is a pre-existing question will decide the claim acceptance in such cases," explains Jayan Mathews, Co-Founder & Chief Product Officer, Vital.
Homecare treatment - Corona Kavach allowed home treatment and purchase of self-help equipment such as pulse oximeter, nebuliser and oxygen cylinders but the same is being rejected without any reason, says Kumar of Insurance Samadhan.
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Pre-existing diseases - Pre-existing diseases are not covered in Corona Kavach. Even a slight mention of diseases such as lung, diabetes hypertension or typhoid or pneumonia is causing claims rejection. "It's possible that a person might have included an ailment like hypertension but develops a problem which is directly or indirectly associated with hypertension for which they want to get treated under policy. Insurer will end up rejecting the claim in such cases. The solution to this is that the person should fully be aware of their underline ailments, which can only be clarified with the doctor or the insurance company," says Ankit Agrawal, Co-Founder and CEO of InsuranceDekho.
Others - Kumar highlights that there has not been any financial underwriting for Corona Rakshak policies. "Now claims are getting rejected because insured's income does not justify his or her income loss of Rs 2.50 lakh, the sum insured in the policy."
Cases are being rejected on the basis that the insured was not careful enough and was in touch with COVID-19 patients. "In families with multiple patients, cases are being rejected," Kumar says.
Claims rejection: What to do
The redressal mechanism is available. The insurers are mandated to respond to your complaint in 15 days. If it doesn't happen, you can write to ombudsman or directly to the regulator IRDA.
"If your claim has been rejected or the settled amount is too low, you should ask for right documents. Get a detailed deduction or claims rejection summary. Read it carefully and accordingly take the complaint to the next level," says Mahavir Chopra, founder, Beshak.org.
If you are not satisfied with the response, you should seek professional help.
"If you have bought the policy through an agent or a broker, they will help you out. There is enough help available on social media too. There are online forums and social media groups where one can ask their queries," he adds.
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