New Delhi: Insurance claim-rejection disputes continued to rise in India during FY26, with 35,186 complaints involving partial or total repudiation of claims recorded during the financial year. Of these, 18,809 cases were disposed of in favour of policyholders or complainants, accounting for 53.46%.
The figures show that policyholders continued to receive favourable decisions in more than half of the claim-rejection disputes decided during FY26. However, the proportion of favourable outcomes declined compared with the previous two financial years.
How Many Insurance Claim Rejection Cases Were Reported in FY26?
According to industry data cited in a Lok Sabha response concerning claims repudiated by insurers, 35,186 complaints involving partial or total repudiation of insurance claims were recorded under Rule 13(1)(b) in FY26.
Of these, 18,809 cases were decided in favour of complainants. This means that approximately 53.46% of the claim-rejection cases disposed of during the year resulted in a favourable outcome for policyholders.
The percentage was 54.57% in FY25 and considerably higher at 63.3% in FY24. The FY26 figure was also below the levels recorded in earlier years, although the number of cases decided in favour of policyholders increased in absolute terms.
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Insurance Claim Rejection Complaints Have Increased
The number of complaints concerning partial or total rejection of insurance claims has increased substantially over the past five financial years.
In FY22, 11,942 claim-rejection cases were received, of which 5,613 were disposed of in favour of complainants. The number increased to 16,083 cases in FY23, with 9,790 decided in favour of policyholders.
In FY24, the number of complaints rose sharply to 27,851, with 17,631 cases decided in favour of complainants. The following year, 31,383 claim-rejection complaints were recorded, while 17,125 cases were decided in favour of policyholders.
The number increased further in FY26 to 35,186 complaints, with 18,809 favourable decisions.
The rising numbers indicate that disputes over rejected or partially rejected insurance claims have become an increasingly significant category of complaints against insurers.
Why Are Insurance Claims Rejected?
Insurance claims can be rejected or partially repudiated for several reasons, depending on the policy terms and the circumstances of the claim.
Disputes can arise over exclusions in an insurance policy, disclosure of information at the time of purchase, documentation, policy conditions, waiting periods, premium-related issues or an insurer’s interpretation of the circumstances surrounding a claim.
However, a claim rejection is not necessarily the end of the dispute. Policyholders who believe that a claim has been wrongly rejected may have avenues for raising a grievance and seeking review or resolution through the applicable insurance grievance-redressal mechanisms.
More Than Half of Broader Insurance Disputes Favoured Policyholders
The broader insurance dispute data also shows that policyholders received favourable decisions in more than half of the cases disposed of during FY26.
During the financial year, 46,122 insurance complaints were decided by courts and forums. Of these, 25,418 cases, or 55.11%, were decided in favour of policyholders or customers.
This was higher than the 53.93% recorded in FY25. However, these figures cover a wider range of insurance complaints and are therefore not directly comparable with the narrower category of claim-rejection disputes under Rule 13(1)(b).
What Complaints Can the Insurance Ombudsman Consider?
Under Rule 13(1), the Insurance Ombudsman can consider several types of complaints involving insurers, insurance agents and intermediaries.
These can include complaints relating to delays in claim settlement beyond the prescribed period, partial or total repudiation of claims, disputes involving premiums and disagreements over the interpretation of policy terms and conditions in relation to claims.
Complaints may also concern policy servicing, issuance of a policy that does not conform to the proposal form, non-issuance of a policy after receipt of premium and certain instances of non-compliance with applicable regulations, guidelines, instructions or policy terms.
This makes the Ombudsman mechanism relevant not only to people whose claims have been rejected but also to policyholders facing other disputes during the insurance lifecycle.
What Do the FY26 Figures Mean for Policyholders?
The FY26 data presents two important trends. First, the number of insurance claim-rejection complaints has continued to increase, reaching 35,186 cases. Second, more than half of the cases disposed of under this category were decided in favour of complainants.
At the same time, the decline in the favourable-decision rate from 63.3% in FY24 to 53.46% in FY26 shows that the proportion of successful complaints has moderated.
For policyholders, the figures underline the importance of understanding policy terms, maintaining relevant documents and records, and seeking clarification or raising a formal grievance when an insurance claim is rejected or partially settled.
The data also highlights the growing importance of insurance dispute-resolution mechanisms as policyholders challenge decisions concerning claim settlement and other policy-related issues.
About the author — Ananya Aradhya writes on cybercrime, fraud, scams, cybersecurity, digital safety, and emerging threats. Her work also covers major criminal cases, financial frauds, consumer scams, and stories that highlight risks affecting people in the real and digital world.
