Dealing with a disability is challenging enough without the added stress of a denied disability insurance claim. In some cases, insurance companies act in bad faith, wrongfully denying legitimate claims. Recognizing the signs of bad faith in disability insurance is crucial to ensure that you receive the benefits you are entitled to.
1. Unreasonable Delays
One of the most common signs of bad faith is when your insurance company causes unreasonable delays in processing your claim. According to the San Digeo disability insurance lawyers at Dawson & Rosenthal, P.C., insurance companies are required to operate in good faith and fair dealing with their policyholders, which means they should quickly investigate claims and payout legitimate claims within a reasonable amount of time.
Disability insurance companies may request excessive documentation or take months to make a decision. These delays can put a financial strain on you and your family, especially when you’re unable to work due to your disability.
2. Wrongful Claim Denial
A straightforward claim denial without a valid explanation is a red flag. If your disability insurance claim meets the policy requirements, but the insurer denies it without justification, it could be a sign of bad faith. Insurers should provide clear reasons for denying your claim, citing specific policy terms.
3. Inadequate Investigation
Insurance companies have a responsibility to thoroughly investigate disability claims. If your insurer fails to conduct a proper investigation or deliberately overlooks important details, it may be acting in bad faith. A hasty or superficial review of your claim can lead to an unjust denial.
4. Ignoring Medical Evidence
Another sign of bad faith is when your insurance company ignores or discounts medical evidence that supports your disability claim. Your treating physicians’ opinions and medical records should carry significant weight in the claims process. If your insurer disregards or minimizes this evidence, it may be acting in bad faith.
5. Lack of Transparency
Transparency is essential in any insurance claim process. If your insurer is not providing clear, timely, and accurate information about your claim’s status, it may be acting in bad faith. You have the right to be informed about the progress of your claim.
6. Changing Policy Interpretations
Inconsistent interpretations of your policy can be a sign of bad faith. If your insurance company shifts its explanation for a denial or changes how it interprets specific policy terms, it could be attempting to avoid paying your claim.
7. Coercive Tactics
Some insurance companies may use coercive tactics to pressure you into settling your claim quickly or accepting a lower benefit amount. Threats, intimidation, or offering a fraction of your claim’s value are tactics employed by unscrupulous insurers.
8. Failure to Communicate
When your insurance company stops communicating with you or delays responses to your inquiries, it may be acting in bad faith. Open, timely communication should be maintained throughout the claims process.
What to Do If You Suspect Bad Faith
Discovering signs of bad faith in your disability insurance claim can be disheartening, but you are not powerless in this situation. If you suspect your insurance company is acting in bad faith, follow these steps to protect your rights and ensure a fair resolution:
- Maintain meticulous records of all your interactions with the insurance company.
- Familiarize yourself with your insurance policy, paying close attention to the terms and conditions relevant to your disability claim.
- If you receive a claim denial or face unreasonable delays, request a detailed explanation from your insurer.
- Contact an attorney who specializes in disability insurance claims.
- File an appeal against your insurance company
- File a formal complaint with your state’s insurance department or regulatory authority.
As a last resort, you may consider pursuing a legal case against your insurer. Consult your attorney about the feasibility of filing a bad-faith lawsuit. Depending on the circumstances, you may seek compensation for the benefits you are owed, plus any additional damages related to your insurer’s wrongful actions.