Understanding Short Settled Claims

Are You Getting Less Than You Deserve?

Ravi had been paying his health insurance premiums for years, trusting his policy in this unpredictable world. Then, when he finally had to file a claim settlement for a hospital bill of ₹2.5 lakh, he was shocked—the insurer approved only ₹1.6 lakh.

Where did the rest of the money go? Why wasn’t the full amount covered?

This situation is called a claim being ‘short settled’, where an insurer approves and pays only a partial amount of the claim filed, instead of the full claim settlement expected by the policyholder.. Short settlement is not just an isolated case—it’s an issue faced by countless individuals across the insurance world.

“How can I fight back?” … Allow Bima Seva Kendra to help.

1. Why Do Insurance Companies Short Settle Claims? Whether you’re a young professional securing your first health insurance plan or a senior citizen relying on your policy for medical expenses, the risk of underpayment by insurers affects everyone. Insurance companies often cite technicalities, policy clauses, or procedural lapses to justify a reduced claim settlement. Some of the reasons are:

At the end of the day, you paid for coverage, and you deserve what you’re owed. Don’t let insurers shortchange you—fight back and claim what’s rightfully yours!

• Sub-Limits and Policy Restrictions Many policies impose sub-limits on specific expenses. For example, your health insurance might cover ₹10 lakh, but if the policy has a room rent cap of ₹5,000 per day and you opt for a ₹10,000 room, the extra amount goes out of your wallet.
• Co-Payment Clauses Some policies include a co-payment clause, requiring the policyholder to pay a percentage of the total claim. If your health insurance has a 10% co-pay clause, a ₹1 lakh claim means you must pay ₹10,000 out of pocket.
• Policy Exclusions and Misinterpretation Mis-selling of insurance policy is a major issue, where policyholders are not informed about hidden exclusions. Insurers may later reject or short-settle claims by citing these exclusions.
• Errors in Documentation A simple mismatch in medical records, incorrect vehicle repair estimates, or missing invoices can lead to insurance claim-related issues, giving insurers a reason to pay less than expected.

But how does one fight back against a Short-Settled Claim ? 

Step 1: Analyze the Settlement Letter Carefully review the claim settlement letter to understand why the insurer has reduced the amount. Compare the insurer’s reasons against your policy document to check if the deductions are justified.

Step 2: Gather Supporting Documents If you find discrepancies, collect all medical records, hospital bills, repair estimates, invoices, policy documents, and communication records to build a strong case.

Step 3: Contact the Insurer for Clarification Reach out to your insurance company and request a detailed explanation for the short settlement. If the deduction is unjustified, escalate the matter immediately.

Step 4: File a Complaint About the Insurance Company If the insurer refuses to pay the full amount, lodge an official complaint through these channels:
● Insurance Company Grievance Cell
● IRDAI Grievance Redressal Mechanism
● Subject Matter Experts – If your complaint remains unresolved, escalate it to the SMEs of the insurance world like Bima Seva Kendra for a fair review.

Step 5: Seek Professional Claim Rejection Services If your claim remains unfairly short-settled, consider hiring a claims expert who specializes in claim rejection services. These professionals understand insurer tactics and can negotiate on your behalf to maximize your claim payout. If you’re struggling with insurance claim-related issues, facing delays in claim settlement, or dealing with claim rejections, experts like Bima Seva Kendra are game changers. When the expertise of 100+ cumulative years meets the dedication of a team to help the aggrieved, you get the essence of SEVA which is Bima Seva Kendra.
 

Conclusion

A short-settled claim isn’t just a minor inconvenience—it’s a direct financial loss that you shouldn’t accept without a fight. Insurance companies may try to cut corners, but as a policyholder, you have the right to full and fair compensation.