Insurance ombudsman doesn't allow third party help: A dilemma for policyholders

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Subscribe to enjoy similar stories. When businessman Mukesh Garg’s two insurance claims were rejected, he represented himself before the insurance ombudsman, a statutory body that helps in out-of-court settlement of insurance cases, but sought help from a third party for the required paperwork. This, however, was a mistake.

“My two claims got rejected in a span of one year. The ombudsman issued an award in my favour in the first one, but when they discovered that a company had helped me out in the first claim, they did not hear my case and passed the award against me in the second one," said Garg. Garg's situation highlights a significant challenge in the system.

While the policyholder and the insurance company get a chance to present their cases, neither can engage a lawyer or any other third party. For most policyholders, navigating this process can be daunting. After an insurance company rejects a claim, the policyholder’s first step is approaching the insurer’s grievance handling department.

If the issue remains unresolved, they can reach out to the ombudsman. The hearing date is fixed (online or physical), and both sides present their arguments. One does not have to pay any fee to lodge a complaint with the insurance ombudsman.

It is a cost-effective system where claims up to ₹50 lakh can be resolved quicker. However, people unaware of its existence or who do not understand the process sometimes reach out to third parties to seek support. Ombudsman officers cannot generally learn about it, but if they do, they may view it in a negative light.

A couple of complainants told Mint they were asked to write a letter stating they would not pay money to any third party. Mint has seen one such copy. "I was told that my case