Insurer rejects liver transplant-related claims citing ‘alcoholism’, man wins Rs 19.2 lakh

The Chandigarh District Consumer Commission has directed an insurer to pay Rs 18.7 lakh and Rs 50,000 in compensation and litigation costs after it denied cashless treatment to a Mohali man who underwent a liver transplant, allegedly citing an exclusion for alcohol-related conditions. The commission found that the insurer failed to prove that the treatment was for an excluded condition, despite rejecting claims across multiple hospitalisations.

President Pawanjit Singh and member Brij Mohan Sharma held that the insurer was liable to pay the amount to the complainant along with interest and compensation.

“Thus, once it stands proved from the above that complainant No. 1 (husband) had not taken any treatment for chronic liver disease prior to his admission in the treating hospital, the case of the complainants does not fall under the Permanent Exclusion clause of the terms and conditions of the policy relied upon by the OP (opposite party: insurer), especially when it is admitted case of the parties that complainant No.1 had been obtaining the subject policy from the OP since the year 2018,” the October 15 order said.

The order added, “There is no dispute with regard to the defence of the OP/insurer that as per policy, treatment for Alcoholism, drug or substance abuse or any addictive condition and consequences thereof were permanently excluded but the OP has not been able to prove that complainant No.1 had taken treatment and submitted claims for any of the aforesaid conditions.”

Liver transplant, rejected claims

The couple, along with their minor son, were covered under the insurance policy which they had purchased in 2018, and renewed regularly, with the 2024-25 period providing a sum insured of Rs 10 lakh and a loyalty of Rs 6 lakh.

In November 2023, the husband was diagnosed with alcoholic liver disease and decompensated cirrhosis, and his request for cashless treatment was declined by the insurer. Following this, he approached the district commission, Chandigarh, which allowed his complaint on November 15, 2023.

Considering the man’s deteriorating condition, doctors advised a liver transplant. His wife agreed to donate a part of her liver, and the couple underwent necessary tests before being admitted for the surgery in October 2024. The hospital raised bills totalling Rs 15.17 lakh for their treatment, but the insurer rejected their cashless claims, citing policy exclusion for treatment related to alcoholism and its consequences. The couple had to bear the expenses themselves.

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Later, the husband was hospitalised twice more for complications following the transplant, once in 2024 and again in 2025. The insurer rejected these claims under the same exclusion. The couple also incurred additional medical expenses during the 2025–26 policy period.

Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the insurer, the complainant filed the present consumer complaint.

‘Hospitalisations fell under exclusion clause’

The insurer resisted the consumer complaint and filed its written version, citing preliminary objections of maintainability, cause of action, etc. It was alleged that the complainant was diagnosed with “Alcoholic Liver Disease With Decompensated Cirrhosis” and the liver transplant surgery and all subsequent treatments/ hospitalisations were a direct consequence of the said alcoholic liver disease. Accordingly, his claims were rightly rejected as they fell under Permanent Exclusion Cause 12 of the terms and conditions of the subject policy, it claimed.

Considering the material on record, the commission noted that the husband was diagnosed at the time of admission with alcoholism for 17 years as per the history, but it was also specifically mentioned that the complainant was diagnosed with CLD (chronic liver disease) for the first time and no previous treatment was ever taken, and hence it held that his case did not fall under the Permanent Exclusion clause of the terms and conditions of the policy relied upon by the insurer.

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The commission directed the insurer to pay a total amount of Rs 18.7 lakh to the man along with interest and also to pay a lump sum amount of Rs 50,000 to the complainants as compensation for causing mental agony and harassment as well as costs of litigation.

Takeaway

The order highlights that an insurer cannot reject a claim under a policy exclusion merely because a treatment is linked to an excluded condition. It must establish that the exclusion applies to the claim, particularly when the records indicate that the condition was diagnosed for the first time and the insured person had not previously received treatment for it.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and union territories (Chandigarh: 0172-270-0183) or call the National Consumer Helpline on 1915 for assistance.

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