My health insurer partially settled my claim. I disagree with the deduction, what should I do?

I was hospitalised recently and my claim was partially settled by the insurance company, citing that the room category was higher than what I was eligible for. I disagree with the deduction; I feel that the insurer treated me unfairly. What should I do now?

- Name withheld

Reply by Nitin Deo - Chief - Underwriting, Claims and Reinsurance,  Zuno General Insurance

I wish you a speedy recovery! Just to let you know, an insurance policy is a contract between yourself and the insurance company. There is no room for arbitrary deductions. You’ll need to speak to the company and get the details clarified. I will explain how a typical deduction in case of a room rent limitation works; this will help you decipher the type of deductions that have been done in your case. 

A room rent restriction is effectively a limit set by the insurer in the health insurance policy, beyond which room charges during the hospital stay will not be payable. Limits are usually a percentage of the sum insured or a value as defined in your policy. During hospitalisation, if you choose a room category higher than your eligibility, the balance is to be paid by you, which is the policy terms and conditions.

It is important to note that hospitals usually charge for services depending on the room category that you have opted for. For example, a higher room category would attract a higher nursing charge, and other associated charges would also be higher. Since your policy has a restricted room charge, all these charges incurred in a higher proportion due to the choice of a higher room category would be deducted in the same proportion. These additional charges are computed in the same proportion of your room rent as shown in the illustration below:

Room Rent eligibility: Rs 3,000

Actual Room Rent: Rs 6,000

You will have to bear the difference of Rs 3,000 per day + 50% of the associated charges.

Policies with room rent restrictions are usually cheaper; however, your out-of-pocket expense at the time of claim could be higher, as evident from the aforementioned example. There are plans available without any room rent restriction, and we highly recommend them due to their inclusive coverage. Choosing your plan depends on your need, and affordability is important.

(Views expressed by the investment expert are his/her own)