Claim Repudiation

Claim repudiation is the formal rejection of an insurance claim by the insurer, accompanied by a written statement of the grounds for rejection. It is a defined act with specific procedural requirements — IRDAI's regulations require the insurer to communicate the repudiation in writing, citing the policy clause and the factual basis for the decision, within the statutory claim-decision timeline (usually 30 days from receipt of all required documents). A repudiation is the insurer's final position on the claim and triggers the policyholder's right to escalate.

The grounds for repudiation fall into a small number of recurring categories. First, material non-disclosure on the proposal form — most often, an undisclosed pre-existing condition discovered through hospital records during claim verification. Second, a claim arising during a waiting period — initial 30-day, specific-disease 24-48 month, or PED waiting.

Third, a claim falling within an explicit exclusion — cosmetic procedures, war and nuclear risks, alcohol or substance abuse, self-inflicted injury, certain congenital conditions. Fourth, lack of medical justification — the TPA's view that the hospitalisation was not necessary or that the treatment did not match the diagnosis. Fifth, documentation gaps that cannot be remedied — missing discharge summary, missing prescription records, FIR not filed for an accident or theft event.

Worked example: Rajesh's reimbursement claim of ₹2. 4 lakh for a coronary stent procedure is repudiated on the ground that hospital records during claim review revealed a 2018 ECG report showing ischaemic changes that he did not disclose on the 2022 proposal form. The repudiation letter cites Section IV of the policy ('material non-disclosure') and attaches the redacted hospital record.

Rajesh has three escalation paths. First, he can write to the insurer's grievance officer requesting reconsideration — sometimes the insurer relents on edge cases. Second, he can escalate on the IRDAI Bima Bharosa portal.

Third, if both fail, he can approach the Insurance Ombudsman (for claims up to ₹50 lakh) or the consumer forum. A common misconception is that 'a repudiation is the end of the road'. It is not.

Indian consumer-forum and Ombudsman case law contains many instances where a repudiation has been overturned on the ground that the alleged non-disclosure was either trivial, immaterial to the claim, or based on records that the insurer could not authenticate. Another common misconception is that the policyholder must accept the insurer's reasoning at face value. The IRDAI requires the repudiation letter to specify the policy clause and the factual basis — vague or boilerplate repudiations can themselves be challenged.

Keep all documents, request the source records the insurer relied on, and proceed sequentially through the escalation channels. Related: claim-rejection, insurance-ombudsman, bima-bharosa.