Getting Hospitalised? Check Your Room Rent Cap to Avoid Last Minute Surprises

While health insurance has become a necessary investment, it is crucial to buy the right health insurance policy by comparing different insurers on various parameters and reading the fine print to avoid any disappointments at the time of claim processing. One of the important things that we should be aware of while buying health insurance is capping on the room rent in case of a hospitalisation.

What is a Room Rent Cap?

The room rent cap is a limit of hospital room costs that are covered by the insurer. The insurer can set a room rent cap either as an amount of how much room rent expenses are covered or as a specific percentage of the sum insured. The type of room rent cap and its amount or percentage is always explicitly mentioned in the policy documents. Before hospitalisation, you should check the room rent cap under your health insurance policy to avoid any last-minute unpleasant surprises.

For example, if the room rent cap mentioned in your policy document is Rs 7,000, then you can claim only up to Rs 7,000 as room rent. Similarly, if the room rent cap is 2% of the sum insured and your sum insured is Rs 5,00,000, then you can claim up to Rs 10,000 as room rent.

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What are the types of room rent capping?

Different insurance companies have different types of room rent capping. Here are the common types:

1. No Cap on Room Rent:

Many health insurance companies offer plans that come without any cap on the room rent. Such plans let you select the hospital and room of your choice as per your convenience and requirements, as there is no restriction on the maximum amount that you can claim as room rent.

2. Specified Cap on Room Rent:

This type of room rent is what we discussed in the example above. The specified cap can either be an amount or a percentage of the sum insured. If your hospital room rent comes above this limit, the insurer will not bear those extra charges, and you will have to pay them from your pocket.

3. Room Rent Co-Payment:

Co-payment, also known as co-pay, is a sharing of room rent expenses with your insurer. Meaning, whatever your hospital room rent may be, you and your insurer will have to pay it together, as mentioned in the policy document. For example, if your policy document says your co-pay is 30% of the room rent and the hospital room rent is Rs 10,000, you will be liable to pay Rs 3,000, and the insurer will pay the remaining Rs 7,000.

4. Room Rent Cap on Specific Room Types:

There are various types of hospital rooms you can choose from, such as a suite, twin-suite, private room, general ward, etc. Certain health insurance policies have a room rent cap only on specific room types. So, you can either choose a room type that does not have any cap on the room rent or choose a room with a cap and pay the excess rent on your own.

5. Room Rent Waiver Add-on:

Many health insurance policies that have a lower room rent cap offer the policyholders to buy a room rent waiver add-on. This add-on removes the room rent cap for a slight increase in the premium.

How does the Room Rent Capping impact the health insurance claims?

The hospital room rent cap largely impacts your health insurance claim settlement because the claim settlement of medical treatments and doctors' fees would also depend on the room rent. If you get hospitalised and the room rent is too high, then the other expenses covered by your insurer can reduce as they will only cover the amount up to the sum insured. Besides, the cost of lab tests and certain medicines can differ with different room categories. So, along with your room rent, the other medical expenses can also increase in the same proportion. In such cases, the insurers are within their rights to reduce the claim amount for such expenses. Therefore, it is necessary to understand the implications of choosing the hospital room with higher rent, especially when your sum insured is low.

Let's say your sum insured is Rs 5,00,000 and the room rent limit is 2% of the sum insured. It means your room rent is capped at Rs 10,000. Now, the other expenses like the cost of medical tests, surgery, surgeon's fees, medicines, etc., will get affected by the cap. If you choose a room with rent higher than its cap and the other medical expenses are also high; your claim amount will get reduced in the same proportion at which your room rent exceeds.

Should you consider Room Rent Capping when buying a Health Insurance Policy?

Now that we have understood how the room rent capping impacts our insurance claim, it should be one of the crucial factors to consider when buying a health insurance policy for you and your family. Comparing different policies offered by different insurers would help you understand the room rent terms better, and you can make an informed decision in selecting the right type of room rent cap that matches your requirement.

To Conclude:

It is advisable not to ignore the room rent cap while buying a health insurance policy and prefer the approach that comes with no room rent cap or higher room rent cap. Generally, family floater health insurance policies with a higher sum insured of more than 10 Lakhs to 15 Lakhs do not have any room rent cap, which lets you choose the hospital and the room as per your requirements and have a comfortable stay at the hospital. However, terms can be different for different policies. Hence, it is advisable to carefully read the terms and conditions associated with room rent capping, including ICU rent capping, before hospitalisation to avoid any unpleasant surprises at the time of filing a claim.

Availing of a personal loan is not as easy as it seems. We understand that a personal loan is usually an urgent requirement, but if your personal loan application is rejected, the points discussed in the article are worth following to ensure your next application does not get rejected. If you apply with the lender with whom your eligibility and requirement match the best, there are fewer chances of loan rejection. However, if you are in a financial emergency and need the funds at the earliest, you should consider other loan options like mortgage loan, loan against securities, gold loan, etc. that have lower interest rates, and unlike a personal loan, these can be availed with an average credit score.

Warm Regards,
Ketki Jadhav
Content Writer