Bad Faith
Insurance
Unum Provident lost a $7.5
million ruling in a federal court in San Francisco at the end
of November 2002 after the court ruled Unum Provident showed bad
faith in targeting a claim for closure. Unum Provident is the
nation's largest provider of disability insurance but has recently
found itself in the middle of increasingly bad press and the target
of lawsuits and a class action. When an insurance company has
been accused and/or found to be using bad faith it is referring
to the insurance company's failure to provide adequate coverage
for a legitimate claim.
When an insurance company has been found guilty
of bad faith it is a complete failure to recognize an individual's
rights. Although not every claim
denial means bad faith insurance practices were used, it is
advised to consult with an attorney specializing in bad faith
claims if you feel your claim was legitimate. An insurance plan
requires an insurer acts in good faith towards the policyholder.
To prove an instance of bad faith an individual
must show that the insurer failed to honor the contract and did
not pay what was rightfully due. There were just short of 3,000
lawsuits filed against Unum Provident in the past five years,
and a class action was filed against the insurance company in
the beginning of November 2002. According to a former Unum Provident
claims handler in the company's headquarters, Unum Provident lawyers
warned claims handlers to use extra caution when denying
claims in certain states to avoid legal troubles.
Insurance companies have the right to deny claims
only in the event that the claim is not fraudulent, the insured
has not lived up to the insurance contract, or the claim is not
covered by the individual's policy. Examples of bad faith and
a possible case for a bad
faith lawsuit can include a claim that was not investigated,
denying payment on a covered claim, unrightfully postponing a
claim investigation, or misrepresenting the contract.
The November 2002 airing of the 60 Minute segment
on Unum Provident included the claim denial of an eye surgeon
that developed a tremor and had to stop operating on patients.
After four months, Unum Provident sent the doctor a letter that
his benefits were cut off because the disability insurance company
did not think he was disabled. Unum Provident sent out a cameraman
to secretly follow the doctor for six days while shooting videotape.
According to Unum Provident, the doctor was not disabled, in fact
he was shown on tape playing football, but the insurance company's
tape had his 23-year old son playing football, not the doctor.
The doctor was later diagnosed with Parkinson's disease but Unum
Provident still did not start paying disability insurance.
In a response to the 60 Minute programming, Unum
Provident stated that the program failed to fully disclose the
facts of the doctor's complex case with viewers. Despite Unum
Provident's steadfast denial of taking part in any bad faith insurance
claims, lawsuits
naming the disability insurance company questions why former
employees would come forward with the same reports of using targets
and financial incentives when denying claims if in fact good faith
was being used.
The
class action and bad faith litigation now underway must find
Unum Provident to have acted in bad faith in order to recover
the benefits of the policy, in addition to any other damages suffered
as a result of Unum Provident's failure to pay a legitimate claim.
If you feel you may have
been the victim of a bad faith insurance claim denial it is important
to contact a bad faith lawyer. The legal specialist will review
your case and determine your best options if a strong case is
present.
Whether or not a settlement is reached
or further legal action must be taken, a lawyer will help recover
the payment and damages you are entitled to. The majority of people
unsatisfied with their disability insurance coverage end up doing
nothing because they become frustrated and feel powerless against
a large company. An attorney that has experience and proven success
with bad faith claim denials will protect your rights.
