Can an insurer reject your claim over a tax issue? Consumer panel answers

Rajasthan's District Consumer Disputes Redressal Commission (DCDRC) in Sirohi ruled that insurers cannot reject a claim solely due to an unrelated tax irregularity.

New India Assurance's claim rejection was overturned because the tax discrepancy had no connection with the insured loss.

The reason for claim repudiation must have a direct link with the policy terms or the insured loss, not with unrelated compliance issues.

The ruling reinforces that insurers must establish a clear nexus between the rejection ground and the insured event.

Policyholders should read the repudiation letter to understand the specific reason; if unrelated to the loss, they may challenge the rejection.