🚗Role of Insurance Ombudsman in Disputes
Customer trust is the backbone of the insurance industry. Yet, disputes over claims, delays, or unclear terms often damage this trust. To provide policyholders with a quick, cost-effective, and consumer-friendly redressal system, the Government introduced the Insurance Ombudsman Scheme under the Redressal of Public Grievance Rules, 1998.
For insurance professionals, especially in motor insurance sales, understanding this mechanism is crucial—not just for compliance but also for enhancing customer confidence.
📌 Why Was the Ombudsman Introduced?
Consumer courts under the Consumer Protection Act, 1986 were overburdened, leading to delays of 4–5 years.
To restore policyholders’ faith, the Ombudsman was created to settle grievances faster and at minimal cost.
The scheme aims to protect customer interests and ensure fair play by insurers.
⚖️ Functions of the Insurance Ombudsman
The Ombudsman has two primary roles:
Conciliation of Disputes – Acting as a neutral mediator between insurer and policyholder.
Award Making (up to ₹20 Lakhs) – Passing binding orders in respect of personal lines of insurance.
Disputes that can be taken up include:
Repudiation of claims (partial or total).
Disputes about premium paid or payable.
Disputes on interpretation of policy terms.
Delays in claim settlement.
Non-issuance of policy documents after premium payment.
🚗 Why It Matters in Motor Insurance
Motor insurance sees a high volume of claims, often leading to disputes. The Ombudsman provides a fair and affordable channel for resolution, reducing litigation burden. For sales managers, this is a trust-building tool:
Customers know there’s a neutral authority to protect them.
It reduces fear of claim rejection when buying policies.
It assures faster resolution compared to civil courts.
💡 Sales Angle: How Agents Can Use This
Build Confidence During Sales
Tell clients: “Even if you face a dispute, you won’t be left helpless—the Insurance Ombudsman will step in.”
Overcome Objections
Customers worried about claim delays can be reassured about the Ombudsman’s powers.
Position Insurance as Safe & Transparent
Highlight the regulator-approved dispute mechanism as proof of industry accountability.
✅ Conclusion
The Insurance Ombudsman plays a vital role in balancing the scales between policyholders and insurers. It ensures disputes are resolved fairly, quickly, and affordably. For insurance professionals, awareness of this mechanism is not just regulatory knowledge—it’s a powerful selling point to win customer trust.
👉 Would you like me to also create a visual infographic (flowchart-style) showing:
Step 1: Internal grievance → Step 2: Ombudsman → Step 3: Consumer Courts
along with the types of disputes covered and the ₹20 lakh award limit?