Health Insurance is commonly regarded as a kind of fiscal cushion–it shields families against the ever-increasing medical treatment expenses. There is a catch here though: having a policy is only half the battle won. The actual ‘test of time’ starts the moment you make a claim. It is then that you know whether your insurer is by your side or not. Sadly, not all claims are settled. Some are rejected, others are repudiated. These terms seem interchangeable to many policyholders. But, in actual sense, they have very different meanings and implications.
The knowledge about Health Insurance claim rejection and claim repudiation is crucial to avoid unpleasant surprises at an already stressful stage of life. In this blog, we will have a closer look into their meanings, their occurrences and how you can cushion yourself against them.
Understanding a Health Insurance Claim
A health insurance claim is simply a request by the insured to the insurance company requesting the company to support against medical expenses. It may be a cashless claim (the insurer pays the hospital bill directly to a network hospital) or a reimbursement claim (you will pay upfront and will be reimbursed later).
In India, millions of Health Insurance claims are paid annually by insurers. As per the 2023-24 annual report by IRDAI, the average claim settlement ratio of the health insurers ranged between 85%-95% (depending on the company). That is encouraging, but it also implies that a part of the claims is denied, either by being rejected or repudiated.
The disparity between the two lies in the cause, the effect, and the subsequent measures that can be taken by policyholders.
What is Claim Rejection in Health Insurance Policies?
A claim rejection occurs when your insurance provider refuses to process your Health Insurance claim due to technical or procedural inadequacies on your side. This does not imply that your Health Insurance policy is not valid. It just means that something has gone wrong on your part, with the filing or submitting of the claim.
Common Reasons for Claim Rejection in Health Insurance
- Incomplete or incorrect documentation – Missing hospital bills, mismatched details, or errors in forms can trigger rejection.
- Delay in claim intimation – Most insurers require you to inform them within a stipulated time (like 24–48 hours for hospitalization). Miss that deadline, and your claim may not even be considered.
- Non-eligible claims – For instance, claiming OPD expenses when your policy only covers hospitalization.
- Policy not in force – If premiums weren’t paid or the policy lapsed, the insurer has no obligation to honor claims.
However, the silver lining here is that claim rejection can often be rectified. Since the denial is based on procedural gaps, you may be able to resubmit the claim with proper documents, within the allowed timeframe. In short, rejection stings but is not always the end of the road.
What is Claim Repudiation in Health Insurance?
Claim repudiation, on the other hand, is a much more serious outcome. It occurs when the insurer determines that the claim is not payable under the contract itself. In simpler words, it’s not about how you filed the claim, but about whether the claim is even valid under the terms of your policy.
Common Grounds for Claim Repudiation
- Non-disclosure or misrepresentation of pre-existing conditions – If you didn’t disclose your diabetes at the time of purchase and later file a claim for a diabetes-related complication, the insurer has legal grounds to repudiate the claim.
- Fraudulent or exaggerated claims – Fabricating hospital bills or inflating expenses is an instant red flag.
- Claims falling under exclusions – Every policy has exclusions, such as cosmetic surgery, self-inflicted injuries, or alternative therapies not covered. Filing for these leads to repudiation.
- Waiting period violations – Most health policies have a waiting period for specific conditions like maternity, hernia, or pre-existing diseases. Filing before the waiting period lapses may result in outright repudiation.
Unlike rejections, repudiations are final and legally binding unless you challenge them through grievance redressal. They strike at the very root of your policy contract. In many cases, repudiation may lead policyholders to reconsider whether they disclosed everything accurately at the time of purchase.
Claim Rejection Vs. Claim Repudiation : A Tabular Comparison
The confusion between these two terms is understandable. Both mean your claim didn’t go through. But their basis and resolution options differ significantly.
Here’s a tabular comparison between the two:
| Aspect | Claim Rejection | Claim Repudiation |
| Nature of denial | Technical/procedural errors | Contractual/legal grounds |
| Examples | Missing documents, late intimation, lapsed policy | Pre-existing disease not disclosed, exclusion clause, fraud |
| Scope for correction | Can often be corrected and resubmitted | Very limited; may require legal action or Ombudsman |
| Impact on policy | Policy remains valid | Can question policy validity if based on misrepresentation |
In short: Rejection is a bump in the road. Repudiation is a dead end—unless you fight it.
Legal and Regulatory Aspects
The Insurance Regulatory and Development Authority of India (IRDAI) has laid down strict guidelines for claim settlement. According to IRDAI, insurers must:
- Acknowledge receipt of claims promptly.
- Decide on acceptance or denial within 30 days of receiving the final document.
- Provide a written explanation for claim repudiation.
Policyholders are also protected under the Insurance Ombudsman scheme, which offers a cost-free, time-bound mechanism for dispute resolution. If you believe your claim has been wrongly denied, you have the right to approach the Ombudsman or even consumer courts.
This regulatory framework ensures insurers cannot arbitrarily reject or repudiate claims without documented justification.
How to Reduce the Chances of Claim Rejection or Repudiation
Prevention is always better than cure, especially when it comes to health insurance claims. Here are some proactive steps every policyholder should take:
- Read and understand your policy terms thoroughly – Don’t rely only on sales pitches. Dig into exclusions, waiting periods, and conditions.
- Disclose everything honestly – Whether it’s smoking habits, hypertension, or prior surgeries—be transparent. Non-disclosure today can ruin your claim tomorrow.
- Maintain proper documentation – Keep hospital bills, prescriptions, diagnostic reports, and discharge summaries neatly filed.
- Pay premiums on time – A lapsed policy is as good as no policy.
- Inform the insurer promptly – If hospitalization occurs, intimate the insurer within the required timeframe.
- Use network hospitals when possible – Cashless treatment minimizes disputes and paperwork.
These simple habits drastically reduce your chances of running into rejection or repudiation.
What You Should Do if Your Health Insurance Claim is Rejected or Repudiated
If you face the unfortunate situation of denial, don’t panic. There are structured ways to challenge or appeal.
- Review the denial letter carefully – Insurers are obligated to explain why the claim was rejected or repudiated.
- Collect additional documents or clarifications – If it’s a rejection due to missing papers, resubmit with all required proofs.
- File an appeal with the insurer – Many insurers have internal grievance redressal mechanisms.
- Approach the Insurance Ombudsman – If unsatisfied, you can lodge a complaint under the Ombudsman scheme for impartial review.
- Explore legal remedies – As a last resort, consumer courts can be approached for disputed claims, especially in repudiation cases.
Persistence and documentation is the key. Most of the claims that may have been initially rejected are approved later on, after the submission of the appropriate evidence.
The Bottomline:
The terms claim rejection and claim repudiation may sound legal jargon to some people. However, to a policy holder, these terms have real world implications. Technical gaps often lead to rejection, which, in most cases, can be addressed. Repudiation though is of a contractual nature and may permanently sabotage your claim.
The moral is not hard to understand here– be open, keep track of things and keep your papers in check. Health Insurance is meant to provide peace of mind in times of crisis. But, it is best operated when the policy holders have a role to play.
At the end of the day, it is all about learning the rules of a game; as soon as you know how the system functions, you are in a much better position to win.
