Bad-Faith Denial for Disability
A bad-faith denial for disability benefits is an unfair, very troubling blow to a policyholder. After paying insurance premiums to ensure that income will be available in the event of a disabling injury or illness, the policyholder has the reasonable expectation of receiving the disability benefits when appropriate. A bad-faith denial of disability benefits occurs when the insurance company illegally or wrongfully engages in a practice such as:
- requiring an unreasonable level or type of documentation of the disability from a policyholder or healthcare provider
- claiming to have never received pertinent information
- using excuses to obstruct a legitimate disability claim
- passing a claimant's file around to consecutive claims adjusters to delay the claim's resolution
- deciding that a valid disability is not valid
- paying only partial disability benefits rather than full benefits
Insurers' Excuses for Denying Disability Benefits
Bad-faith denial for disability occurs when the insurance company fails to adequately honor a policyholder's legitimate claim. An insurance company will often try to provide some type of excuse for bad-faith denial for disability in an attempt to evade legal action by the aggrieved insured. The insurer may say, for instance, that:
- a policy does not cover this individual's situation, or
- the proper documents were not received in a timely manner
- the individual is not truly disabled, or not disable to the agree that he or she alleges
Disability Benefits from Several Sources
Disability insurance is defined as income paid to a policyholder when he or she is unable to work due to illness or injury. This income may be provided by one or more sources, including:
- an employer
- a private insurer (such as Unum Provident)
- Social Security Disability Income (SSDI) or another federal program
- state disability insurance
In addition, a disability that occurs as a result of an individual's employment may be covered by Worker's Compensation. Bad-faith denial for disability can also occur in cases of health insurance claims that have been unreasonably denied due to a policyholder's disability.
Seek a Legal Remedy
When a policyholder is unreasonably denied disability benefits, it is extremely helpful to contact a plaintiffs' insurance lawyer, who will evaluate the case to determine whether it is a bad-faith denial for disability. Many insurance companies have an appeals or grievance process that must be exhausted before legal action is possible. If the appeal is internally denied in a bad-faith denial for disability case, the insured can file a lawsuit to seek compensation for losses.
Compensatory and Punitive Damages for Bad Faith Insurance Practices
A disability policyholder who receives a bad-faith denial can sue to recover compensatory losses, including out-of-pocket expenses incurred because of the denial (and interest on those expenses), emotional distress, and more. In cases of malicious or willful bad-faith actions, punitive damages may also be awarded in a bad-faith denial for disability case.
Talk to a Lawyer about Bad-Faith Denial for Disability
If you feel that you are the victim of a bad-faith denial for disability, contact us to speak with an experienced insurance attorney in your area who can evaluate your case to determine how best to protect and maximize your legal interests.
Be assured your matters will be in experienced & caring hands.
