Room Rent in Health Insurance: Everything You Need to Know

A health insurance policy has become imperative for everyone today. Not only does it provide thorough coverage against the healthcare expenses the policyholder may incur during a medical emergency, but also it allows the insured person to avail free health check-ups and timely treatment for illnesses.

However, you should remember that most health insurance plan comes with lots of terms and conditions. And you should be knowing these terms and conditions before buying the policy to avoid any rude shocks during the time of claim settlement. One such term associated with health insurance plans is “room rent limit”.

Room rent limit is a common sub-limit found in many mediclaim policies. Before knowing more about health insurance room rent limit, let us first discuss what is room rent in health insurance.

What is Room Rent in Health Insurance?

When a person gets admitted in a hospital, he/she has to pay a daily rent or per day room charges to occupy a room or bed in that hospital. Room rent in health insurance refers to the coverage for these boarding charges or per day room charges that the policyholder may have to pay while he/she remains admitted in a hospital.

Room rent largely depends upon the type of room and hospital a policyholder opts for. For example, room rent for a single or double occupancy room is more than a ward or a multiple-occupancy room. Similarly, room rent for private hospitals are much higher as compared to the same type of rooms at government hospitals.

What is Room Rent Limit?

Now that you know about the room rent, it would be fairly easy for you to understand the concept of room rent limit in health insurance. It is the capping or limit imposed on the coverage of room rent of a hospital by a health insurance policy. The room rent limit can either be expressed as an absolute amount or as a fixed percentage of the sum insured.

In other words, room rent limit in medical insurance policy is the maximum amount of per day room charges a policyholder can claim when he/she gets admitted to a hospital. Any amount above this sub-limit will have to be borne by the policyholder himself/herself.

For example, if your health insurance room rent limit is ₹ 5,000, then the maximum room rent you can claim under the policy is ₹ 5,000. In case the limit is expressed as “2% of the Sum Insured”, and you have chosen ₹ 5 lakhs as the sum insured, your room rent limit will be ₹ 10,000.

How does the room rent limit affect your health insurance claim?

Room rent limit in health insurance is a very important concept. Your entire claim for health insurance coverage will depend on this room rent limit. Not only does it cap the maximum per day room charges you can claim on a policy, but also it limits other expenditures such as doctor’s fees, treatment costs etc. Let’s understand this with the help of an example.

Suppose, you purchased a health insurance plan with a Sum Insured of ₹ 5 lakhs where the room rent is 1 percent of the Sum Insured. This means that the actual room rent limit for your policy will be ₹ 5,000. Now, if you get hospitalised and choose a room whose rent is below ₹ 5,000 per day, you will be able to claim for all expenses incurred on hospitalisation, without any deductions.

It means that you incur ₹ 3 lakhs during the hospitalisation, you will get the entire ₹ 3 lakhs amount from the insurer upon filing a claim.

However, if you choose a room whose rent is more than ₹ 5,000 per day, your claim amount will be deducted in equal proportion by which the room rent exceeds the room rent limit of your policy. It means that if your room rent is ₹ 7,500, then you will get only 5000/7500 i.e. only 67 percent of the total expenses incurred by you during hospitalisation.

It means that if you incur ₹ 3 lakhs during hospitalisation, you will get ₹ 2.01 lakhs only (3,00,000 * 0.67) from the insurance provider.

Is such a reduction in claim amount fair?

In reality, it is. This is because hospitals charge differently for same services for different room types. It means that the fees for a doctor’s visit in a shared room can be ₹ 1,000 whereas the fees for a visit by the same doctor in a private room can be ₹ 2,000. Hence, insurance companies pay a proportionate claim if the policyholders opt for expensive rooms.

So, what should you do?

The concept of room rent limit in health insurance is beneficial only till you are choosing a room whose rent is below the capping. Otherwise, it can significantly affect the claim amount that you will get. Hence, the best option is to go for a mediclaim policy with no room rent limit. By opting for such a policy, you will be able to avail treatment at the room of your choice, without worrying about the capping.

For instance, you can purchase ICICI Lombard’s Complete Health Insurance Policy which have no capping on room rent. Additionally, this policy is easy to purchase and comes with an option of lifetime renewability.

ICICI Lombard also provides health insurance plans like Personal Accident Insurance, Health Booster, Arogya Sanjeevani Policy, Corona Kavach Policy which offers people with the much needed financial backup during any medical emergencies