Claiming health insurance from multiple insurers!

Narendra had to undergo an angioplasty surgery suddenly. His family was convinced that his old health insurance policy worth Rs 75000 bought 10 years ago would be sufficient to meet the expenses of surgery and hospitalization for 4 days. They were in for a rude shock when the bill came up to Rs 185,000. Health and hospitalization costs have gone up during the recent years and a single health insurance policy bought years ago, often falls short. Having more than one health insurance is very common these days. One may be the one that your employer gives you and the other you might have bought as a personal cover.  You may also have one policy to cover your parents and the other may be for your family.

You bought these covers to be doubly sure. However, what do you do in case of a hospitalization? How do you claim? Will it be from both the insurers, what proportion etc are some of the doubts that arise in the minds of the insured?

There has been some recent change in the rules regarding claiming from multiple insurers. The IRDA (Health Insurance) Regulations 2013 announced this February changed the way claims are made from each of the multiple insurers. Prior to these rules any claim from multiple insurers had to be in the ratio of coverage.

For Ex: You had a 2 lakh policy from your employer and 1 lakh policy bought on your own. There is a hospitalization for Rs 75000, then you would have to inform both the insurers and the claim settlement would be made according to the contribution clause. In this case your employer insurance would pay Rs 50000 and Rs 25000 by the insurer of your private policy. This process was not customer friendly and presented many hurdles to the insured.

However, after the new regulations have been put in place, there have been many changes. You can decide to against which insurer you would like to claim. If the amount of claim is less than or equal to the amount insured then you can claim the entire insurance from a single agency.

Let us see in the above case, how would this work out. The claim amount is Rs 75000, so if you go the group insurance company (employer), the claimed amount is less than the sum insured, so they will pay the entire amount. And in case you approach the second insurer (personal policy), this company would pay the entire amount, as the claim is less than the total amount insured.

Let us also see an example where the claim amount is Rs 250000. Here the claim amount is higher than the amount insured, then any single insurer cannot settle the claim, hence the contribution clause will have to be applied. Your company insurer will be pay Rs 166667 and Rs 83333 by your second insurer.

Keep in mind that documentation will have to be complete with each of the insurers. You would need to submit the entire sets of documents to both the companies. Hospital would have to give you a certified set of copy of the bills and other documents in addition to the original documents. So keep in mind, more the number of policies you would have to deal with more documentation. The documents required by each insurer may also differ.

Now that the rule is simple, you should know the process that will have to be followed for claim settlement and the ways to maximize your claim. The process that would have to be followed is

Inform all the insurance companies about hospitalization, at the same time you would also require to pick the company that you will claim first from. At the time of discharge, you would need to fill up the form for claim with all required documents. Remember you would need to submit the original documents to the insurer from who claim first. You would need to keep attested copies for your next claim.

Here, an important thing that you would need to keep in mind is that, only after the claim from the first insurer is settled, you can submit your claim with the second insurer. The first insurer will issue a claim settlement certificate, which will have to be submitted to the second insurer. Accordingly, the third claim can be claimed only after the second is cleared. Each claim may take around 30-45 for clearing, more the number of claims, more time taken in entire claim to be settled.

In case if it is a cashless claim, only the claim from first insurer is settled cashless and subsequent claims will have to be claimed on a reimbursement basis.

Some points to be noted to maximize your benefit:

§ Always claim insurance from your group insurance first, as the claim settlement would be faster. Also you would save on your no-claim bonus or premium loading during your next renewal of personal health insurance policy.  Generally group insurance covers pre-existing illnesses and does not have waiting period unlike individual health insurance policies.

§ Try and have a big cover from one insurer, also pay attention to the exclusions that the policy may have.