Room Rent & Proportionate Deductions

A short hospital story from West Bengal — and the math that shocked the family

A story many families in West Bengal recognise

Soumen Babu lives in Nadia.
Three years ago, he bought a ₹5 lakh health insurance policy for his family. The premium felt reasonable. The agent said, “Good company, no worries.”

Last year, Soumen Babu needed surgery in Kolkata.

Nothing fancy — a well-known private hospital, a decent room, ₹10,000 per day.

The surgery went well. The total hospital bill came to ₹4.25 lakh.

Soumen Babu felt relieved. “Insurance will take care of this,” he thought.

Then came the shock.

The hospital said:
“Sir, the insurance company has approved only ₹1.60 lakh. You’ll need to pay the rest before discharge.”

Soumen Babu was stunned. The policy was ₹5 lakh. The bill was within limits. So what went wrong?

The answer lay in one ignored line in the policy

The clause that changed everything

Soumen Babu’s policy had this rule:

      Room Rent Limit: 1% of Sum Insured per day

His sum insured was ₹5,00,000.

So the allowed room rent was: 1% of ₹5,00,000 = ₹5,000 per day

But the hospital room cost ₹10,000 per day.

That single mismatch triggered something called Proportionate Deduction.

What is Proportionate Deduction ?

Most people believe room rent affects only the room charge. That belief is wrong.

When proportionate deduction applies:

The insurance company reduces many parts of your hospital bill, not just the room rent.

Doctor’s fees. Nursing charges. Operation theatre charges. ICU services.

All of them get reduced in the same ratio.

The math behind Soumen Babu’s claim

Let’s break it down slowly.

Policy details

Sum Insured: ₹5,00,000
Room rent allowed: ₹5,000/day
Room rent chosen: ₹10,000/day

		Step 1: Calculate the ratio 
     Allowed room rent ÷ Actual room rent 
= ₹5,000 ÷ ₹10,000 
=  0.5 (50%)  
    

		Step 2: Apply the ratio to the bill
     Total eligible hospital bill: ₹4,25,000 
Insurance company applies 50% proportionate deduction: 
₹4,25,000 × 50% = ₹2,12,500 
    

		Step 3: Other deductions 
     From this reduced amount, the insurer further deducted:
	  non-medical expenses 
 policy exclusions 

	 Final approved amount ≈ ₹1.60 lakh 

Soumen Babu had to arrange over ₹2.5 lakh immediately.
    

Why this feels unfair — but is legally valid

Soumen Babu felt cheated. Emotionally, that reaction is natural.

But legally, the insurance company followed the policy wording.

The clause was always there. It was just never explained clearly.

This is why room rent rules are among the biggest claim destroyers in India, especially in West Bengal, where:

private hospital room rents often range from ₹6,000–₹15,000/day
ICU charges escalate quickly
multi-speciality hospitals rarely offer rooms under ₹5,000/day

Common room rent structures you’ll see in policies

					1.  Percentage-based room rent
				 Example:
				  “1% of Sum Insured per day”
“2% of Sum Insured per day” 

				 This is the most dangerous format if sum insured is low. 
				

					2.  Fixed room rent limit
				 Example:
				  “Up to ₹5,000 per day”
 “Up to ₹7,500 per day”

				 Safer than percentage-based, but still restrictive.  
				

					3.  No room rent limit
				 Example:
				  “No cap on room rent” 
This is ideal and usually found in:
 premium policies
modern “zero pocket pay” plans  
  
				

Why West Bengal families are more exposed

In many district towns and Kolkata:

good nursing homes charge ₹6,000–₹8,000/day
private hospitals charge ₹8,000–₹15,000/day
ICU costs can be ₹15,000–₹25,000/day

A ₹5 lakh policy with a ₹5,000/day limit is already outdated in today’s cost environment.

The silent myth that causes damage

“I’ll just pay the room difference.” This is the most dangerous assumption. You don’t just pay:

₹5,000 extra for the room. You may end up paying:
40–60% of the entire bill.

🛡️ How to Protect Yourself

✔

Step 1: Check the room rent clause first

Before checking benefits, riders, or premium.

✔

Step 2: Match room rent with your city

Look at real hospital room costs where you’ll likely go.

✔

Step 3: Avoid percentage-based room rent

Especially if the sum insured is below ₹10 lakh.

✔

Step 4: Prefer policies with no room rent cap

Even if the premium is slightly higher.

✔

Step 5: If already stuck with such a policy

Consider:

migration within the same company
porting to a better plan
increasing sum insured to raise room rent limit

What this page wants you to do

Don't panic. Don't blame yourself. Not blindly trust brochures and agents.

Just check one clause carefully — before it checks your bank balance.

You can do one more thing. You can seek advice from Winsure Health. We are highly skilled in this field, and we are the only organization in West Bengal that guides people correctly regarding health insurance. So, don't delay, contact us today.

Knowledge Hub