Insurance Claim Notice

What is an Insurance Notice? 

An Insurance Notice is a formal legal communication served by a policyholder (insured) or their legal representative to an insurance company, highlighting non-compliance, delay, denial, or deficiency in claim processing, coverage, or service delivery. It is usually issued under the authority of an advocate and marks the initiation of formal dispute resolution if amicable follow-ups have failed. 

The notice puts the insurer on record for breach of policy terms and often precedes legal action under consumer protection laws or civil remedies. It plays a crucial role in documenting the insured’s grievance, establishing a timeline of events, and triggering the insurer’s legal obligation to respond or act. 

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Common Reasons for Sending an Insurance Notice 

An Insurance Notice is sent for various reasons, most commonly when: 

• The insurance claim is denied without valid justification 
• There is delay in disbursing the approved claim amount 
• The insurer remains non-responsive despite repeated reminders 
• The insurance company fails to honor the terms and coverage clauses of the policy 
• The policyholder faces mental harassment, inconvenience, or financial hardship due to the insurer’s conduct 
• Policy documents are not issued, or contain incorrect details 
• The insurer alleges fraud or misrepresentation without evidence 

When Should You Send an Insurance Notice? 

An Insurance Notice should be sent in any of the following circumstances: 

• After submission of a valid claim and no response is received within a reasonable period (typically 15-30 days) 
• When the insurer’s response is evasive, vague, or unjustified 
• If the claim has been wrongfully denied or delayed 
• When informal communication (calls/emails) have failed to resolve the issue 
• As a mandatory pre-litigation step before filing a consumer complaint or civil suit 
• When there is emotional or financial distress caused by the insurer’s inaction 

What Does an Insurance Notice Include? 

A comprehensive Insurance Notice typically contains: 

1. Name and designation of the manager or officer addressed 
2. Complete details of the policy: type, number, insured person, and date of commencement 
3. Incident description triggering the insurance claim 
4. Date of claim submission, and a list of documents submitted 
5. Amount claimed, and the amount pending 
6. Details of communications made (calls, visits, emails), including last contact date 
7. Clear assertion that the insurer is in breach of policy contract 
8. Mention of “deficiency in service” under Consumer Protection Act, 2019 
9. Legal demand for settlement within a specified number of days (e.g., 7/15/30 days) 
10. Claim for compensation for mental agony, harassment, and legal costs 
11. Legal warning regarding initiation of civil and consumer proceedings in case of non-compliance 
12. Statement reserving the insured’s rights and remedies under law and equity 

This notice must be drafted by a competent advocate to ensure legal enforceability and impact. 

Consequences of Ignoring an Insurance Notice 

If an Insurance Notice is ignored by the insurance company, the following consequences may arise: 

• The insured may file a consumer complaint before the District, State, or National Consumer Disputes Redressal Commission 
• The insurer may face adverse orders, including direction to pay the full claim amount, interest, litigation cost, and compensation for harassment 
• Court costs and damages may be imposed under civil law 
• The insurer’s conduct may be reported to IRDAI (Insurance Regulatory and Development Authority of India) 
• Persistent non-compliance may attract penal consequences or reputational damage 
• It may lead to enforcement of claim through civil execution proceedings 

Governing Laws 

The issuance, content, and enforceability of Insurance Notices are governed by the following laws: 

• Insurance Act, 1938 
• IRDAI Act, 1999 and associated regulations 
• Consumer Protection Act, 2019- Section 2(1)(g), 2(11) for "deficiency in service" 
• Indian Contract Act, 1872- enforcement of contractual obligations 
• Civil Procedure Code, 1908- for legal notice and litigation steps 
• Motor Vehicles Act, 1988- in motor insurance claims 
• IRDAI Grievance Redressal Guidelines and policy terms and conditions 

Adherence to these legal frameworks ensures that the notice is not only valid but also actionable. 

FAQs Related to Insurance Notice