Responsible people prepare for the worst. They make sure that, if something happens to them, their families will be taken care of and they won’t become a burden to the people they love. For more than a century, there has been a simple way to do that: by buying individual long-term disability insurance. Social Security Disability (SSD) doesn’t go far. Private or employer-sponsored insurance isn’t cheap, and it usually won’t pay all of the bills after an accident or illness, but it often means the difference between a family maintaining its lifestyle with some adjustments and a family declaring bankruptcy. It’s no secret that American families these days are strapped for cash, and that a third of them are just one paycheck away from missing a rent check or defaulting on their mortgage.
Under the law, disability insurance companies are required to deal fairly and act in good faith with their policyholders, and to not deprive the insured of the benefits of the policy. The unfortunate truth, however, is that many insurance companies don’t act that way. They advertise in a way that plays upon our fears and our sense of duty and responsibility, take our money, then turn around and treat disability claims like an adversarial process. They deny claims without fully investigating or evaluating them, fight medical diagnoses, and challenge every claimed loss — while trying to negotiate a settlement that gets them off the hook while giving you less than you bargained for and paid for. They know you are hurt, and need the money to pay your bills now that you’re out of work.
If your disability insurance claim was wrongfully denied, we may be able to help. For over 50 years, The Beasley Firm has set the standard for representing injured workers, consumers, and patients, obtaining over $2 billion in jury awards and settlements. Read on for how we approach disability insurance “bad faith” lawsuits. The below description focuses on Pennsylvania, as we focus our work on claims in Pennsylvania and New Jersey, but the principles generally apply to all long-term insurance disability claims. We stay connected with insurance bad faith lawyers throughout the country — if you have a claim elsewhere, we can refer you to experienced, qualified attorneys.
Long-Term Disability Insurance Claims Are All About The Process
Insurance companies go out of their way to imply to consumers, through advertisements and carefully scripted phone calls with policyholders, that the claims process is simple and straightforward, with the insurance company assisting the policyholders. That’s how it’s supposed to be, but the insurance companies have spent millions of dollars on consulting services, and have devoted years of experimentation, to come up with internal processes designed to frustrate and confuse policyholders, in the end to help the insurance company justify reducing the value of the claim or denying it entirely.
We have studied those misleading and deceptive procedures, and have come up with our own procedures for ensuring all claims are presented in their best, rather than worst, light. Our procedures keep the insurer on their toes and force them to comply with the law. Did you know that, in Pennsylvania, the Pennsylvania Department of Insurance has issued regulations requiring all insurance claims be completed within 30 days? Here’s the regulation:
Every insurer shall complete investigation of a claim within 30 days after notification of claim, unless the investigation cannot reasonably be completed within the time. If the investigation cannot be completed within 30 days, and every 45 days thereafter, the insurer shall provide the claimant with a reasonable written explanation for the delay and state when a decision on the claim may be expected.
The insurance companies don’t advertise this fact on their own materials; instead, they try to stall claimants by deliberately drawing out their requests for information, so they can claim “the investigation cannot reasonably be completed.” Each new request for information helps the insurance company restart the clock for another 45 days, thereby delaying the claim will you seek out information they did not initially tell you that you needed to obtain.
We thus start every claim by grabbing all of the information – like W-2 S, medical records, and medical bills – we need to show the full extent of your economic losses right from the beginning, so the insurance company can’t claim they didn’t know about the extent of your injuries and financial losses.
Winning A Long-Term Disability Claim Is All About the Medical Proof
The most common reason long-term disability claims are rejected is because the insurance company claims there are “no objective findings” of the disability, or that the disability isn’t enough to “disable you from your occupation.” If you are seriously injured, we help ensure you are receiving appropriate medical care. Insurance companies and employers have to pay more on claims, and grant more sick leave and family medical leave, when doctors diagnose more severe conditions, and so they tried to send policyholders and employees to doctors they know well minimize the patient’s injuries.
Through our extensive work in personal injury cases, we are intimately familiar with the physicians in Central and Southeastern Pennsylvania — the Philadelphia, Allentown, Easton, Chester, Reading, Scranton, Harrisburg, Wilkes-Barre and Williamsport areas, and we know which ones routinely dismiss claimant’s conditions as “malingering” so they can get more work from the insurance companies. (We know New Jersey’s physicians, well, too, particularly Camden and Cherry Hill.) Whether it’s an orthopedic surgeon, a neurologist, a general surgeon, or otherwise, we can help make sure you’re properly diagnosed and receiving the care you need.
If An Insurer Didn’t Deny The Claim On The Medicine, They Denied It On The Language Of The Policy
We know how to argue what insurance policies really mean. Insurance policies are written by insurance companies, and so they are frequently loaded with ambiguities and complexities that insurance companies believe will give them an “out” — that is, a dubious reason to deny the claim. Under Pennsylvania law, however, ambiguities in insurance policies are interpreted against the insurance company and in favor of the insured. Further, policy “exceptions” and “exclusions” are interpreted in favor of the insured. If your disability claim has been denied on the basis of an ambiguity in the insurance policy, we know how to prove that the policy should be interpreted in your favor.
Showing The Insurer Was Wrong Is One Thing — Proving “Bad Faith” Is Quite Another
In general, lawsuits by policyholders against insurance companies revolve around two legal claims: breach of contract and “insurance bad faith.” (The exception is when the disability insurance is sponsored by the claimant’s employer, which means the lawsuit has to be filed as an ERISA claim.) When an insurance company doesn’t pay a claim they should have paid, that is a breach of the insurance agreements, and the insurance company is responsible to pay the full value of their provable claim.
In Pennsylvania, however, if a claimant can prove “bad faith” by the insurance company, they can recover additional damages, such as punitive damages, attorney’s fees, and cost of suit.
Proving An Insurance Company’s “Bad Faith” In Evaluating Claims
So what is “bad faith” under Pennsylvania law? Although the insured doesn’t have to prove fraud, “mere negligence or bad judgment is not bad faith.” Brown v. Progressive Insurance Company, 2004 PA Super 346, 860 A.2d 493, 501 (Pa. Super. Ct. 2004). The insured must ultimately show that “the insurer breached its duty of good faith through some motive of self-interest or ill will.” Id. Finally, the insured has to prove ‘bad faith’ by clear and convincing evidence — a higher standard than the ‘preponderance of the evidence’ standard for most civil claims. Terletsky, 649 A.2d at 688.
Put simply, “to recover on a bad faith claim, the insured must prove: (1) that the insurer did not have a reasonable basis for denying benefits under the policy; and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis in denying the claim.” Northwestern Mutual Life Insurance Company v. Babayan, 430 F.3d 121, 136–137 (3d Cir. 2005). Sounds straightforward enough, but both elements involve showing the insurer was “unreasonable.” What’s that mean?
In the most basic sense, an insurer intentionally denying valid claim because it wanted to save money would be “unreasonable,” and if a plaintiff found a smoking gun memo showing that, it would make a big difference. But that’s rarely the case, and so the plaintiff has to use circumstance means to show the unreasonable conduct of the insurance company.
As the federal appellate court that oversees Pennsylvania wrote in the Babayan case:
Courts have extended the concept of ‘bad faith’ beyond an insured’s denial of a claim in several limited areas. See W.V. Realty, Inc. v. Northern Ins. Co., 334 F.3d 306, 317-18 (3d Cir. 2003) (insurer’s failure to follow internal guidelines evidence of bad faith); Bonenberger v. Nationwide Mut. Ins. Co., 2002 PA Super 14, 791 A.2d 378, 381 (Pa. Super. Ct. 2002) (insurer’s claims practice manual is relevant evidence in bad faith claim against insurer); O’Donnell ex rel. Mitro v. Allstate Ins., 1999 PA Super 161, 734 A.2d 901 (Pa. Super. Ct. 1999) (bad faith may extend to the misconduct of an insured during the pendency of litigation); Liberty Mut. Ins. Co. v. Marty’s Express, Inc., 910 F. Supp. 221 (E.D. Pa. 1996) (bad faith may extend to an insurer’s conduct in retrospectively rating and collecting premiums).
There are thus many ways to show “unreasonable” claims handling. We do it by scrutinizing every part of the insurance claims file, by deposing the adjusters and their supervisors, by serving a subpoena for their internal policies — as well as speaking with insurance industry experts, even former employees of the company. We then show how the conduct violated basic requirements for insurance companies, to make it just as clear as if they had run a stop sign.
Contingent Fee Lawyers To Fight Wrongfully-Denied Disability Insurance Companies
Unlike the insurance companies, we know that, when you are hurt, disabled, and unable to work, you often don’t have the funds to pay your ordinary bills, much less pay for a lawyer. Thus, in our disability insurance lawsuits, we represent our clients on a contingent fee basis. Our clients never pay us anything out-of-pocket: we advance all costs on the case – like insurance industry expert witnesses, court deposition fees, and electronic records subpoenas – and then we are paid entirely out of the recovery for the claimant.
We bring claims against all the major insurers, including The Standard Insurance, Harleysville Life Insurance, Unum Life Insurance, United of Omaha Life Insurance, Liberty Life Assurance, John Hancock Mutual Life Insurance, Aetna, Lincoln National, Berkshire / Guardian, Provident Life Insurance, Hartford Life and Accident Insurance, Life Insurance Company of North America, Prudential Insurance, New York Life, Paul Revere, AXA Equitable Life Insurance, Reliance Standard Life Insurance Company, Metropolitan Life (“MetLife”), and CIGNA Life Insurance. We also review all major disabling medical conditions, from the claims where the insurer admits the injury but disputes the severity (like spinal cord injuries and traumatic brain injuries), to the diseases the insurance companies stubbornly refuse to admit a policyholder has, like Crohn’s Disease, Degenerative Disc Disease, Lupus, and Multiple Sclerosis.
If your short-term or long-term disability claim has been wrongfully denied by your insurance company, contact The Beasley Firm for a free, confidential consultation. We focus our practice on claims in Pennsylvania and New Jersey, but we stay connected with insurance bad faith lawyers throughout the country — if you have a claim elsewhere, we can refer you to experienced, qualified attorneys.