What are your legal rights to private disability, when your insurer denies your claim?
Insurance companies often use underhanded tactics to reject and delay claims for long term disability insurance. Many people come to us feeling defeated, angry and distraught after their claim was denied.
If your insurance company has wrongfully denied your claim for benefits, you must not give up. Talk to a private disability attorney who holds a highly successful track record in these matters. It is important that you obtain experienced legal representation immediately.
When a claim is denied, your legal rights to private disability insurance depend on several factors.
If you purchased a long term disability insurance policy directly through a private insurance broker, it is governed by state contract and bad faith law. If you have a group disability plan through your employer, it is governed under the rules of a federal law called ERISA (Employee Retirement Income Security Act).
When appealing denied disability claims, there are significant differences affecting the legal rights to private disability policies governed by ERISA law versus private disability governed by state laws.
Under a non-ERISA long term disability insurance claim:
- You are allowed a jury trial.
- You are allowed to fully engage in evidence and discovery.
- You may file a lawsuit seeking benefits plus punitive damages against your insurer for bad faith.
Bad faith insurance laws exist as state laws and regulations. They are in place to protect consumers from dishonest or unfair practices by insurance companies.
A basic definition of bad faith insurance is:
Refusing to pay a claim without a reasonable basis; and even if the insurer has a reasonable basis for denial, the insurer failed to investigate the claim in a suitable or timely manner.
Each state’s definition of bad faith varies to some degree. For some states, it means broadly saying an insurance company’s denial is “unreasonable or without proper cause.” Other states more narrowly say the insurer acted in bad faith only if it denied a claim that is not “fairly debatable.”
Most states impose an implied duty of good faith and fair dealing on disability insurance policies. The “good faith obligation” compels the insurance company to go further than the actual words on the insurance policy. It requires them to act fairly and reasonably in handling, examining, deciding and paying a claim.
With policies that fall under federal ERISA law, your rights and options are firmly limited:
- You are not allowed a trial by jury.
- Strict limitations apply as to when evidence can be introduced. The administrative appeal is generally the only opportunity you have to submit evidence of disability.
- Only after the administrative appeal is exhausted can you file a lawsuit against the insurer.
- You are not allowed to seek punitive damages against the insurer.
Examples of Bad Faith Insurance Conduct
Denials of disability claims are often cases of bad faith actions by the insurance company. Bad faith insurers unethically resort to denial tactics that enable them to delay, underpay and deny payment of claims. Be aware if an insurance company attempts to:
- Neglect your calls, or fail to respond promptly upon notification of your claim.
- Deny benefits as a result of not doing a prompt and thorough investigation of your claim.
- Unfairly misinterpret the language and definitions in your policy.
- Fail to approve or deny benefits within a reasonable time upon receipt of your claim.
- Lowball your claim, quoting a dollar amount much less than your case is worth.
- Settle the claim on a policy that was altered without your knowledge or consent.
- Fail to promptly provide reasonable basis for a claim denial or a reduced benefit award.
- Make difficult, repetitive demands for documentation not required under your policy.
- Resorting to fraudulent or unlawful investigative methods and tactics.
- Hide or lose documentation.
- Victimize you through harassment, intrusion or demeaning investigative measures.
- Misinterpret the law to your disadvantage.
- Advise you that you do not need a lawyer.
And that is just the tip of the iceberg.
If you have been fraudulently or unfairly denied long term disability benefits, a bad faith lawsuit may be possible. To be successful in a bad faith lawsuit, we must show that the insurance company’s delay or refusal to pay benefits was unreasonable or without proper cause.
Bad faith cases are determined by a court of law according to the specifics of the case. The court will interpret the applicable statutes and case laws in their determinations.
Protect Your Legal Rights to Private Disability
The insurance company will lead you to believe that your case is defeated and you have no recourse. They may hold out until forced by the court to give you the benefits you are entitled to. They will use medical records, employer’s statements, vocational evaluations, and any other evidence they believe is relevant to your claim.
If you have been denied a private disability claim, do not sign anything from the insurance company without talking with us.
To ask a lawyer about your legal rights to private disability, call 800-562-9830. This critical consultation is absolutely free and without obligation.
It makes no difference whether your case is under state or federal court. Private disability lawyer Marc Whitehead is highly familiar with state disability insurance laws and the complexities of federal ERISA law. We can help you no matter where you live.
We know how to handle insurance companies, such as Unum, Aetna, Liberty Mutual, Prudential and the rest. We have the skills, knowledge and strength to fight for your case from beginning to end.