In Brief
An elderly couple purchased a renewable medical insurance policy covering angioplasty. When the second appellant required the procedure in 2008, the insurer paid only Rs. 2 lakhs instead of the claimed Rs. 3.82 lakhs, citing new coverage caps in the renewed policy. The Supreme Court held that the insurer breached its duty of utmost good faith (uberrima fides) by failing to disclose material changes in coverage terms at renewal. Even if renewal creates a fresh contract, the insurer must inform policy holders of limitations affecting their choice. The failure to disclose constituted deficiency of service under consumer protection law. The Court restored the lower tribunal's order directing full payment.
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