The Ernakulam District Consumer Disputes Redressal Commission has ruled that the refusal by an insurer to reimburse medical expenses incurred following a road accident constitutes both an unfair trade practice and a deficiency in service. The verdict arose from a complaint filed by K. M. Muhiyudheen of Pallari Mangalam, Ernakulam, against Oriental Insurance Company and Medisep.
In January 2023, the complainant sustained serious injuries to his left leg when his vehicle collided with a jeep. He was immediately admitted to Kolenchery Medical College, which was not an empanelled hospital under his insurance plan. Following treatment, Muhiyudheen sought reimbursement of ₹94,276 from Oriental Insurance Company.
The insurer denied the claim, arguing that reimbursement for treatment at non-empanelled hospitals is permissible only in genuine emergency cases and contending that the circumstances of Muhiyudheen’s treatment did not meet this criterion. They also noted that the complainant had not utilised Medisep’s grievance redressal mechanism prior to approaching the commission.
The commission reviewed a memorandum of understanding dated 27 June 2022, signed between the state finance department and Oriental Insurance, which explicitly classifies road accident treatment as an emergency condition eligible for reimbursement at non-empanelled hospitals.
Citing Supreme Court precedents, the commission emphasised that any ambiguities in insurance policy terms should be interpreted in favour of the consumer. It further clarified that remedies available under consumer protection law are independent and do not restrict access to consumer courts.
Concluding the proceedings, the commission directed Oriental Insurance and Medisep to refund ₹94,276 to the complainant with 9 percent interest. In addition, they were ordered to pay ₹20,000 as compensation for mental agony and ₹5,000 towards court expenses, all within 45 days.