Policyholders are increasingly taking insurance companies to consumer court: comprise 27% of cases in 2022
Notably, out of the 5,78,061 pending cases, a staggering 1,61,134 are related to the insurance sector, indicating a state of chaos within the industry. These numbers also signal a steep rise in the resoluteness of the consumers to seek redressal in case of claim rejection or discrepancy with the cover amount.
The growing consumer awareness backed by the efforts of the Insurance Regulatory and Development Authority of India (IRDAI) is strengthening consumer advocacy in the insurance sector.
The government recently flagged a few crucial issues before the IRDAI and asked the regulator to address them quickly to lower the number of cases held with the consumer court. A lack of transparency in insurance contracts, rigid terms and conditions, claim rejections due to pre-existing diseases, and tying crop insurance claims' success with central schemes were highlighted as a few issues in the sector.
This prompted IRDAI to simplify the grievance redressal process to offer suitable quick solutions to policyholders. Additionally, the government plans to develop a reliable grievance redressal process to help settle policyholders' claims faster and encourage them to seek timely redress.
Also Read: What to do if if insurance company rejects your claim
The Department of Consumer Affairs suggested insurance companies implement the following measures to protect consumer's interests and help them in these ways.
Keep insurance policy documents' language simple for transparency
The policy documents need to be more transparent by writing the terms and conditions in simple language so that the layman can understand the wording easily.
