Can a health insurer reject a hospitalisation claim by citing a waiting period for an illness that is not covered under the relevant exclusion clause? This is exactly what happened when a policyholder diagnosed with dengue challenged HDFC Ergo General Insurance’s decision to deny his claim. He did not sit quietly and approached the Delhi State Consumer Disputes Redressal Commission, which ruled in his favour.
Keep on reading to learn why this case shows how important it is to review what your insurance policy doesn’t cover and to understand the reasons an insurer relies on while rejecting a claim.
Why did HDFC Ergo reject the dengue hospitalisation claim?
The dispute arose after Mr Kumar, who had a health insurance policy, was diagnosed with dengue fever on 2 November 2019, and subsequently hospitalised for treatment.
On medical advice, he was admitted to Max Super Speciality Hospital in Patparganj, Delhi, on November 3. His request for cashless treatment was rejected by the insurer on November 6.
Kumar subsequently shifted to Max Super Speciality Hospital in Vaishali, where his cashless request was again denied on November 12. He was discharged on November 21.
According to his complaint, Kumar paid Rs 3.71 lakh towards the first hospital bill and Rs 8.11 lakh towards treatment at the second hospital. He also incurred pre- and post-hospitalisation expenses.
He said he had to borrow money and sell his wife’s jewellery to meet the treatment costs.
Kumar claimed a total of Rs 17.99 lakh, including hospitalisation and pre- and post-hospitalisation expenses. However, HDFC Ergo repudiated the claim citing a two-year waiting-period condition relating to a prolapsed intervertebral disc (PIVD) treatment, a spinal disc condition.
Kumar challenged the rejection, arguing that his treatment was for dengue and that the insurer had not supplied the policy’s terms and conditions to him.
Why did the consumer commission rule in Kumar’s favour?
The District Consumer Commission, in its order dated 31 October, 2023, ruled that the insurer had failed to establish that the policy’s terms and conditions had been duly supplied to the insured.
“It accordingly held that the exclusionary conditions could not be enforced against him and directed payment of Rs 10 lakh, being the sum insured applicable to the relevant policy period, along with interest at 6% per annum, Rs 30,000 as compensation and Rs 20,000 towards litigation costs,” says Vivek Kumar, Advocate, Delhi High Court.
Unhappy with this order, HDFC ERGO appealed against it, contending, inter alia, that the claim was subject to a 24-month waiting period.
However, the State Commission found no cogent justification for rejecting the cashless facility and upheld the District Commission’s order.
The ruling is significant because the insurer’s decision was tested against the actual diagnosis and the specific exclusions contained in the policy, rather than being accepted merely on the basis of the insurer’s interpretation of the waiting-period clause, explains Kumar.
Why did the state commission dismiss HDFC Ergo’s appeal?
The Commission examined Clause A(ii) of Section V, titled “Special Terms and Conditions”, which prescribed a 24-month waiting period for specified illnesses, diagnoses and surgical procedures enumerated in the policy.
Upon examining the relevant medical records, the Commission found that the policyholder had been diagnosed with dengue fever. Dengue was not included in the list of illnesses or procedures attracting the stipulated 24-month waiting period, explains Kumar.
Consequently, the Commission held that the waiting-period exclusion could not be extended to dengue fever when the illness was not covered by the enumerated exclusion. It observed that the 24-month waiting period did not apply to the respondent’s illness, added Kumar.
The commission found no cogent reason for the insurer to cancel the cashless facility under the circumstances. Upholding the District Commission’s order, the State Commission dismissed HDFC Ergo’s appeal on October 6, 2026.
ET Wealth Online approached HDFC ERGO General Insurance for its inputs, but we did not receive any response at the time of publication.
What does the ruling mean for health insurance policyholders?
A health insurance claim cannot be rejected solely based on a waiting period unless the insurer establishes that the illness falls under the applicable policy exclusion.
“Upon obtaining a policy, the policyholder must always insist on the complete policy wordings, as exclusions that were never communicated may not bind. The policyholder should always ensure that the cover remains continuous. A break in the cover, as in this case, may reset the waiting-period clock and give room to the insurer to justify rejection,” says Sohil Shah, Partner at Pioneer Legal.
Further, when the insurer rejects a claim, always test the rejection against the actual diagnosis and the actual policy wording, and ask the insurer to name the specific clause it relies on, he adds.
It is important to remember that a declined cashless request is not the end of the road. Pay the hospital, keep every record, and then make a claim for reimbursement. Finally, a claim is capped at the sum insured for the policy year in which treatment took place.