When a person is traveling overseas, they are promised that an overseas insurance cover will be available that will take care of any medical needs for the time that they are abroad. This is a fairly simple policy whereby a local insurer will give them a policy in collaboration with an overseas insurer. Medical treatment abroad can be fairly expensive, and taking such a policy is meant to provide the traveler with peace of mind. But what happens when the insurance is not paid up when the treatment is taken ? It can be very painful for the afflicted, and the money involved can be fairly large. So here is a case whereby the insurance company was forced to pay up after its overseas arm refused to pay up:

AHMEDABAD: The Consumer Disputes Redressal Forum, Ahmedabad District (Rural), has ordered United India Insurance Company Limited to pay $5041.65 as compensation to Smruti Bhaskar Patel for gross negligence, deficiency in service and unfair trade practices.
Smruti had paid a premium of Rs 3, 281 and taken an overseas mediclaim policy from United India Insurance on April 22, 2002, covering her during the period from April 27 to July 10, 2002. During her stay in the USA, Smruti suffered from acidity-related laryngeal lesion and was treated at the John Hopkins Hospital on July 1 and 2, 2002. She underwent a surgery on the second day. Smruti paid US $ 3632.15 towards the charges for surgery and subsequent hospitalisation up to July 9, 2002. She submitted her claim form with original documents to Mercury International Assistance and Claims Ltd., the UK-based agent of United India Insurance. They returned some of the documents along with an undated letter and asked for a few other documents.

She never did get the money directly, and it is only when the Consumer Court took this case that she would have been sure of getting her money back. What the problem is that the insurance company acts in such a way that its directly harmful to the consumer, even though they have paid up and have done all the right things. It in such cases that the court should start applying penal charges.