Delhi High Court Orders Full Reimbursement for COVID-19 Hospitalisation Claims

In a landmark judgment, the Delhi High Court has ruled that a government circular issued during the COVID-19 pandemic, which regulated hospital charges, cannot restrict an insurance company's obligations to policyholders. Justice Sachin Datta directed United India Insurance Company Limited to release the outstanding balance to petitioner Reena Goel, whose hospitalisation claim was not fully settled, despite it falling within her policy coverage.

The court deemed the non-release of the owed amount as unjustified, contradicting clarifications from the Insurance Regulatory and Development Authority of India (IRDAI). These clarifications, issued in January and April 2021, had established that the Delhi Government's circular from June 20, 2020, aimed to manage hospital fees, not decrease insurance reimbursements.

The case highlighted disparities between the hospital charges and the insurance coverage Goel was entitled to. Despite Goel's base and additional policies covering ₹6 lakh total, the insurer only reimbursed ₹1,75,340 for an incurred cost of ₹3,56,295, citing the same circular. The court has now mandated that United India Insurance Company settle the remaining claim within four weeks.

(With inputs from agencies.)