Recently, we told you about how insurance companies got themselves into trouble in the ‘80s by inventing a new kind of policy – the “own occupation” policy. It’s designed to pay out if someone becomes disabled and can’t perform their job duties, but insurers made it so specific that an anesthesiologist can still collect if she’s working as a different kind of doctor, and a trial lawyer might be able to litigate and get benefits as long as he wasn’t trying cases in a courtroom.
They thought that they’d be able to make money from these because rates at the time were so high, but when those rates fell and people started filing claims, they were in big trouble. To cover their losses and protect their businesses, many insurers came up with plans to cut costs that involved finding ways to cancel more policies and deny more claims.
Tricks Insurers Use to Keep from Paying Your Claim
These methods aren’t comprehensive, but they do represent some of the most common ones employed by insurance companies the second someone with an “own occupation” policy submits a high-value claim for long term disability.
Misrepresentation. Insurers love this one because often they’ll let policyholders pay for 10, 15, even 20 years, and then as soon as they submit a claim they have experts pore over the application to see if anything you said wasn’t 100 percent true or accurate. Some states limit the ability of insurers to do this, but even then they can drop claimants if they can prove the incorrect information was given on purpose. Additionally, insurance companies will do everything they can to show that the condition responsible for your current claim actually first appeared before you got their insurance. If they can prove this, they can deny coverage.
No objective evidence. Many companies now automatically look at any disability claims involving depression, headaches, strain, and back pain for insurance fraud and demand that you provide “objective” evidence, such as MRI results (the expert findings of doctors aren’t enough). And if your MRI does show something, they’ll then attempt to argue that the problems you’re complaining about don’t match the MRI findings.
Redefining “own occupation.” Watch out if you ever take on any work beyond your primary occupation, because insurers will jump on this. For example, a surgeon who can’t operate anymore might be denied because he’s also an “author” for writing a single medical book 20 years ago.
Next time we’ll show you even more ways insurers try to deny “own occupation” medical disability claims, including trying to have them classified as ERISA claims.