Insurance - Are Policyholders Protected?

YES, insurance services fall under the Consumer Protection Act, 2019. If an insurance

company, agent, or broker engages in unfair trade practices, misrepresentation, or

deﬁciency in service, the policyholder can seek redressal.

Insurance as a "Service" Under Consumer Protection Act, 2019

• Section 2(42) – "Service" includes banking, ﬁnancing, insurance, and similar

services.

• Section 2(11) – "Deﬁciency in Service": If an insurer fails to provide promised

beneﬁts, the consumer can ﬁle a complaint.

Types of Insurance Covered:

• Life Insurance (Term plans, ULIPs, Endowment policies)

• Health Insurance (Mediclaim, critical illness cover)

• Motor Insurance (Own damage, third-party cover)

• Travel Insurance

• Property & Business Insurance

When Can You File a Complaint

1. Unjustiﬁed claim rejection or delay in claim settlement

2. Mis-selling of policies (hiding terms, selling unsuitable policies)

3. Denial of insurance coverage despite valid claims

4. Non-disclosure of hidden charges

5. Unfair trade practices & misleading advertisements

6. Wrong deductions in claim amounts

Complaint Procedure.

1. Complain to the insurance company’s grievance redressal cell.

2. Approach IRDAI (Insurance Regulatory and Development Authority of India)

via their Grievance Management System (IGMS).

3. File a Consumer Complaint Under Consumer Protection Act, 2019:

• District Consumer Commission

• State Consumer Commission

• National Consumer Commission