Insurance claim denied? Things to know before choosing between Insurance Ombudsman and Consumer Forum

Has your genuine insurance claim been denied by your insurance company? Are you angry because of it? You paid the full premium to the insurance company, even so, your company refused to pay you back in the time of your need. Your insurance company gave you a baseless reply when you asked for your genuine claim. You are curious How to take action against an insurance company? Do you have a dilemma in choosing the proper forum between Insurance ombudsman or Consumer court? This article will try to help you in your decision in choosing proper authority against your insurance company. 

Indian Government created an insurance ombudsman scheme to safeguard the rights and interests of policyholders against Insurance Companies. Under this scheme, it created the insurance ombudsman in several cities having different jurisdictions. A list of the ombudsman is handy on the IRDA website. 

The insurance ombudsman is empowered to listen to grievances against General Insurance Companies, Life insurance Companies, Standalone health insurance companies. So if your insurance company repudiated your claim, and you are dissatisfied with the repudiation, you may file a grievance before the Insurance Ombudsman. 

It is very important to send your complaint to the correct ombudsman. Going to an incorrect forum is just like sitting on the wrong public transport bus. It will never take you to your desired location and you will end up wasting your time and energy until you find the correct bus. Similarly, you must make sure you send your complaint to the correct ombudsman. 

A correct ombudsman is the one that has territorial jurisdiction on the consumer's place of residence. It means if you are living in Bangalore and your insurance company office is in Mumbai. In that case, a consumer should file a complaint with the ombudsman having jurisdiction over Bangalore city.

You can file a complaint by email or by sending a simple letter to the ombudsman. The proceedings are very informal and consumer-friendly. 

Consumer Forum/Consumer court/Consumer Commission is a quasi-judicial body headed by a consumer commissioner along with other members. Consumer forum is established under the consumer protection act 1986 to shield every consumer in India. The consumer forum is authorized to listen to complaints from every person who falls under the definition of consumer. Unlike a Consumer forum, an Insurance Ombudsman is an insurance specific forum and allowed to listen only to insurance-related disputes.

The Act distributed the jurisdictions of consumer forum in two categories

1. Territorial Jurisdiction: As per Territorial jurisdiction, a consumer can file a complaint in a consumer forum falling among his place of residence, his place of profession and business, insurance companies' place of business.
2. Pecuniary jurisdiction: Pecuniary jurisdiction means a consumer forum can listen to consumers complain up to a certain claim amount and any complaint beyond its pecuniary jurisdiction has to be filled in the superior forum. Pecuniary jurisdiction for District is up to 20 Lakh, State commission Rs. 20 Lakh to 1 Cr and National commission is Above 1 Cr.Save upto 70% on Car Insurance Premium

As we mentioned earlier, the Insurance ombudsman is a specific forum for Insurance complaints whereas the consumer court can listen to every consumer complaint emanating from any consumer grievance. Generally, you do not need to hire a lawyer to present your case in both the ombudsman and the consumer forum, but in the consumer forum, it is very difficult to defend a case without the support of a lawyer. 

They swiftly decide cases in the ombudsman as compared to the consumer forum. You can file a consumer case if it does not satisfy you with the ombudsman award but not vice versa. There is no appeal against the order of the ombudsman but you can always file an appeal against the order of the consumer forum. 

Proceeding before the ombudsman is less technical as compared to the consumer forum. So if you are intending to file a complaint against your insurance company make sure you examine all the above differences before choosing the correct forum.