What to do if you have trouble with your insurance policy?

By Super

Updated: Saturday, May 31, 2014, 10:07 [IST]

What to do if you have trouble with your insurance policy?

‘This was not the benefit which was promised'. ‘The agent did not explain this to me'. ‘The insurance company cheated me of my money'. ‘The insurer is not hearing my complaints properly'.......and the list goes on and on. How many of us have heard one or more of such grievances in our daily life? I suppose almost everybody. These grievances are very frequent and common in the context of insurance. This is one of the reasons people have a mental block when it comes to investing in insurance resulting in very low penetration of insurance in India given its huge population. These grievances don't go unheard, insurers realize that the customers are very important for their business and so they maintain an internal grievance cell to listen to customer grievances. However if the customer is not satisfied with the insurer's redressal process he may take his problem to court or if he wants, he may settle for an out of court settlement via the insurance ombudsman.

Who is an ombudsman?

The governing body of Insurance Council appoints the ombudsman who is a non-judicial authority vested with the necessary powers to quickly dispose of the grievances of customers through an out of court settlement process.

Where to find the ombudsman?

The ombudsman has been given territorial jurisdiction in 12 cities of India and he will settle cases falling within the scope of his jurisdiction. The insurers are mandated to mention the address of the insurance ombudsman in their policy bond.

Who can approach the ombudsman?

Anyone having any complaint with regard to a policy taken on personal lines can approach the ombudsman if they have approached the insurer with their problem and the insurer

Has not resolved the grievance
Has resolved the grievance but it is not to your satisfaction
Has not responded to the complaint at all for 30 days.

What kind of complaints can be lodged?

Complaints pertaining to the following can be lodged with the ombudsman:

Any partial or total repudiation of claims.
Dispute regarding premiums paid or payable in terms of the policy
Delay in settlement of claims,
Non- issue of any insurance document after taking the policy.

What will the ombudsman do?

The ombudsman acts as a mediator and has the power to make a recommendation or an award. He will study the given facts and recommend a fair solution to the dispute, if the customer accepts the recommendation; the ombudsman informs the company which has to comply with the recommendation within 15 days.

If the dispute is not settled via recommendation, the ombudsman will pass an award within 3 months of receiving the complaint which will be binding on the insurer but not so on the customer.

Are there any limitations on the ombudsman's powers?

Though the ombudsman has the relevant authority to solve disputes, yet there are limitations. For instance, if the customer has already lodged a court complaint, the ombudsman will not look into those matters. Moreover, the ombudsman cannot settle disputes of a value which is more than 20 lakhs.

How soon is the complaint disposed of?

The ombudsman is supposed to give his recommendation within 1 month; otherwise he has 3 months to pass his award.

Thus, going to an ombudsman for your grievances is a better choice since it will be an out of court speedy settlement and that too free of cost. So, the next time you are having any complaint with regards to your policy, the ombudsman is there to solve your problems.

Written By: Deepak Yohannan

The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com

You may contact him directly on Twitter: @dyohannan