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How to Talk Back to Your Insurance Company

What you do and say can make a huge difference in the outcome of your claims settlement. Be sure to read this guide before making that first call!
The insurance industry is an extremely complex business. Policies are written in confusing and incomprehensible language. Misrepresentations concerning coverage are common and claims handling practices vary widely.
Whether an insured will recover for a legitimate claim depends largely on the consumer’s own knowledge of his or her rights and responsibilities.
The following questions and answers represent areas of common concern and importance to claimants. For specific information regarding particular policies you should consult an attorney specializing in this field.

General Considerations

Do not speak to any claims representative or insurance company until you have read and understand all applicable policy provisions relating to your particular claim.
Always take detailed notes of conversations with insurance representatives. Record the date, time, name, position and telephone number of the person with whom you are speaking, and the substance of each conversation. Keep these notes in a file and save them.
Confirm in writing all important conversations with insurance company representatives. This is to avoid the possibility of later disagreement as to what was said. Be polite and factually accurate. Never exaggerate. Keep copies of all correspondence.
Never give a tape recorded statement or statement under oath without being certain beforehand that you fully understand your legal rights.
Insurance contracts must be interpreted in light of the reasonable expectations of the policyholder;
“Coverage” sections must be interpreted broadly, while “exclusions” must be read narrowly;
Phrases or words not defined within the policy will be given any reasonable interpretation which favors coverage; and
Certain words (such as “disability”) are to be defined by the courts, not by the insurance policy. If the policy attempts a narrower definition than the court permits, it will not be given legal effect.
  • Deny a claim without thoroughly investigating the foundation for its denial.
  • Delay payment of benefits – even if payment is eventually made.
  • Make deceptive representations to the insured or claimant.
  • Compel a claimant to accept an unreasonably small settlement of a claim in order to take advantage of a claimant’s financial need.
  • Falsely accuse an insured of trying to defraud the insurance company in order to reduce the value of the claim.
  • Unreasonably seize upon a minor flaw or omission in the insured’s claims form as a basis to refuse a claim.
  • The unreasonable denial of an insurance claim that should have been paid; or
  • The unreasonable failure to defend a policyholder who has been sued under a policy; or
  • The unreasonable failure to protect the assets of a policyholder who has been sued.
  1. The policy benefits themselves;
  2. All additional financial loss caused by the loss of benefits;
  3. General damages;
  4. Attorneys’ fees (in some cases); and
  5. Exemplary damages if the company acted with malice, fraud or oppression in conscious disregard of the rights of the claimant.

II. Health, Life and Disability Policies

If an entire group is canceled, the insurer must offer a “conversion” policy to its insureds. This rule is mandated by statute. However, conversion policies seldom offer similar coverage as the prior policies. Often premiums are doubled or tripled with coverage being cut as much as 80% or 90%. In many cases, the conversion offering by the insurance carrier may be illusory and therefore not a valid offer at all. In such situations, the provisions or intent of the conversion statute may have been violated giving rise to a claim.
Many people are canceled at a time when they are currently receiving treatment for an illness contracted while they were insured. This illness would be excluded or would make them uninsurable with a new insurance carrier. In the context of these cancellations California law requires the continuation of certain benefits which vested or took place under the old policy. This is a complicated subject which should be handled with utmost care.
Most life policies provide a contestability period of two years. This means that if the insured dies within two years of the issuance of the policy, the carrier may “contest” its obligation to pay if they can claim that any material misstatement was made on the application. These are very difficult situations because often the only witnesses to the application process were a self-interested agent who may have earned a 30 or 40% first-year commission and the policyholder who is now deceased. If the conduct of the insurer or their agent was wrongful, the benefits must be paid; if their conduct was also unreasonable, a bad faith claim may also be made.
If the exclusion was not part of the original policy but added later and if it reduces coverage, than at least 45 days written notice of the change must be given to the insured.
The exclusion will be construed narrowly (whereas the coverage will be construed broadly). For example, many policies exclude “cosmetic surgery” but do not give a definition of “cosmetic.” In such a situation, surgery for the removal of breast implants that has been recommended by a physician for health reasons should be covered. In addition to the above, please see Question 9 on vesting. This situation would arise when an insurance company seeks to reduce its coverage or re-define terms by giving 45 days written notice of the change.
However, the issue of whether or not an employer’s providing of these insurance benefits constitutes an ERISA plan is usually a question of fact, not just a question of law.
Contact us. If you have any questions about your disability coverage, please contact one of our long-term disability lawyers at (800) 264-2082. Long term disability is all we do.

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