The Insurance Regulatory and Development Authority of India (IRDAI) has revealed concerning data for FY2024: nearly one-third of all registered insurance claims remain unpaid.

This includes over 3 crore claims filed during the year, valued at Rs. 1.1 lakh crore, in addition to 17.9 lakh claims worth Rs. 6,290 crore outstanding from earlier years.

The challenges faced by policyholders, from claim rejections to long settlement delays, highlight a critical need for greater transparency and better support.

What the numbers say

• Total Claims Filed in FY24: Over 3 crore claims worth Rs. 1.1 lakh crore.
• Claims Settled: 2.7 crore claims were paid, amounting to Rs. 83,493 crore. This represents approximately 82% of claims by volume and 71.3% by value.
• Unpaid Claims: Rs. 15,100 crore worth of claims were rejected, with insurers citing terms and conditions in the policy contracts.

The gap between filed and paid claims leaves many policyholders feeling frustrated, especially during critical moments like health emergencies or property damage.

Challenges faced by Policyholders

The challenges go beyond unpaid claims, reflecting systemic issues that impact policyholders at multiple stages:

1. Lack of Transparency: Insurance policies often have complex terms and conditions that are not always explained upfront. Key details are often buried in fine print, leading to disputes at the time of claiming.

Example: A policyholder may not realize that pre-existing health conditions are excluded until they file a claim.

• Delays in Claim Settlement: Despite IRDAI’s directive for immediate or same-day settlement of health insurance claims, delays remain common. Many policyholders report waiting 24-48 hours or longer for claim approvals during hospital discharges.

• Conditional or Partial Settlements: It’s not uncommon for claims to be partially approved or outright rejected for reasons policyholders find invalid. According to a recent LocalCircle survey:
• 20% of respondents reported claims were rejected with invalid reasons.
• 33% stated their claims were only partially approved, often without clear explanations.

Examples:

• Claims for health conditions like diabetes may face restrictions or lower payouts.
• Property insurance claims may be denied due to technicalities like insufficient evidence.

• Policyholder Fatigue: The prolonged claims process can wear down policyholders, forcing them to accept lower settlements out of frustration or urgency. This benefits insurers but increases out-of-pocket expenses for policyholders, undermining the very purpose of insurance.
  

Why These Challenges Persist

Despite IRDAI’s efforts to improve service standards, gaps in implementation remain. The regulator has encouraged measures like web-based claim tracking and faster processing, but compliance is inconsistent across insurers.

• 83% of policyholders want 100% web-based claims processing with real-time updates.
• Only 8% of health insurance claims are processed instantly during hospital discharges.
  

Steps to Protect Yourself

To minimize claim-related challenges, follow these steps:

1. Choose the Right Policy: With insurancepe’s expert guidance you can identify a policy that meets your specific needs, whether it’s health, property, or business insurance.

1. Maintain Records: Keep all policy documents, receipts, and related records organized. This helps in quickly submitting accurate claims.
2. Report Claims Promptly: File claims as soon as possible to avoid complications or delays.
3. Appeal Denials: Don’t accept claim rejections at face value. Seek professional advice to challenge unfair decisions.
   

How insurancepe can help

Insurance is about peace of mind, and we believe no policyholder should have to face unnecessary stress when filing a claim. insurancepe is here to simplify your insurance journey:

• Clear Policy Understanding: We help you understand your policy inside out, so you’re fully aware of what’s covered and what’s not.
• Seamless Claims Assistance: From document preparation to follow-ups, we manage the entire claims process, ensuring minimal delays.
• Support with dispute Resolution: If your claim is denied or partially approved, we help you negotiate with insurers and advocate for your rightful settlement.

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