The Consumer Disputes Redressal Forum, Ahmedabad (Rural) ordered the United India Insurance Co. to also pay the claimant, Reshma Trivedi, nine percent compound interest for "negligence and deficiency" in service.
The forum also asked the company to pay Rs.5,000 towards the legal costs of the complainant.
In reaching its verdict, the forum relied on a ruling of the National Consumer Redressal Commission that "a general insurance company cannot reject a claim only on the basis of assumptions and experience of a doctor who had not seen, examined or treated a patient".
Trivedi had undergone a second hernia operation in 2002 and filed a claim of Rs.27,500. The company rejected the claim, saying that the ailment existed when she applied for the policy but this had not been specified under the policy's pre-existing clause.
Thus, the company held, the exclusion clause was applicable to Trivedi.
Appearing on her behalf, Consumer Education Research Society (CERS) contended that it was the insurer's responsibility to prove that Trivedi's affliction was a pre-existing disease.