Your insurance company and policy are supposed to protect you in case of an accident that leaves you disabled, but sometimes some insurance companies refuse to pay you what is due. Fortunately, there are ways to get your insurer to cover you and pay the disability benefit.
Can the insurer refuse to pay a disability insurance benefit?
An insurer can refuse to pay an insurance benefit as long as it has solid arguments. If your insurer finds a flaw in your record that it believes proves you have not complied with your contract, he is legally allowed to walk away from its responsibilities. However, you should know that you can object if you feel that your request is legitimate and you are certain that you have not overlooked any aspect of your insurance policy.
Can I be reimbursed for my legal fees?
What are the exclusions in a disability insurance policy?
Disability insurance policies or contracts are lengthy documents written in highly technical language that usually include exclusions that justify the insurer’s refusal to pay. There are two types of exclusions:
- General exclusions
- Specific exclusions
It is therefore important to read your contract carefully. If anything is unclear, don’t hesitate to contact your insurer to ask questions.
General exclusions
General exclusions are found in most disability insurance policies. The most frequent ones are the following:
- Voluntary acts on the part of the insured: situations in which the insured has implicated himself (misdemeanors, crimes, drug use, etc.).
- If the insured is guilty of terrorism, riots, war or sabotage
- Suicide
- Depression
Specific exclusions
As far as specific exclusions are concerned, they are mostly the result of limitations of guarantees. Here are the most frequent ones:
- The practice of a dangerous sport
- The practice of a professional activity considered risky
- The practice of a sport or activity with the aim of attempting to establish a record
- A medical history noted before the signature of the contract and which worsens
- Back or spinal pain and aches
- Professional overwork, also called “burnout”
How do insurers deny disability insurance?
An insurer has the right to refuse to pay a disability insurance benefit, provided, of course, that it has adequate justification. How do insurers do this? There are several instances in which a insurer can refuse to pay:
- Non-compliance with the terms of coverage: This occurs when the insured’s behavior is inconsistent with the terms of the disability insurance contract he signed.
- Late reporting of the incident: in the case where the insured has not complied with the deadline established in the contract they signed and has delayed to notify and request compensation for the disability, the insurer may refuse payment.
- Lying or omission: if the insured has concealed, voluntarily omitted or failed to inform the insurer of a situation, risk or change, the insurer may refuse to pay by stating that he doesn’t have all the necessary information.
- Overestimation of your disability: if the insured voluntarily or involuntarily overestimates his inability to work or the length of time his disability will last, and an expert can verify this, the insurer can revise the compensation downwards or even refuse it.
- Exclusions: if the insured’s disability is similar to one or more of the exclusions in the contract he signed, the insurer may refuse to pay the benefit.
- Default in payment of premiums: logically, if the insured is in default with the premiums he owes for his disability insurance, the insurance company naturally does not have to compensate him in the event of disability.
How to choose the right lawyer to represent you
How do you challenge a denial of payment by your disability insurance?
As an insured, if your insurer notifies you of a denial of disability insurance benefits, you may dispute that decision. If you wish to dispute your disability insurance payment denial decision, follow these steps in order:
- First, take the time to read and review your disability insurance policy. This step will confirm whether or not the insurance company has the right to deny your claim.
- It is highly recommended that you make an appointment with a civil liability attorney to analyze the reasons for the denial of the disability benefit you have applied for.
Even so, if this does not result in the withdrawal of your disability insurance company’s denial of payment:
- Send an informal appeal and contact the claims department. Send them your file by registered mail, with acknowledgement of receipt, so that they cannot say that they did not receive it. The file must contain all the elements that justify your claim (a detailed written statement, your arguments, your contract number, as well as your insurance policy number).
- Use an outside arbitrator, i.e., a mediator, to rule on the denial of a disability insurance benefit. If your out-of-court complaint to your insurance company has not been successful, you will need to find another mediator who is neutral and independent of the situation in order to reach an agreement that is acceptable to both the insured and the insurer.
- Settle the dispute in court: going to court is the last recourse the insured has if he feels that his rights have been infringed. This last step is particularly rare and, above all, costly, because if you proceed properly, one step at a time, very few disputes are not settled before this recourse. You can contact the team of Équité Avocats, lawyers specialized in civil liability, in order to assert your rights.
How can you avoid a denial of your disability insurance payment?
It is never a simple matter for an insured to take action against an insurer that refuses to pay a disability insurance benefit. These actions are costly in terms of time, energy and especially money. To avoid a denial, stick to your contract and find an insurer with a good reputation.
Respect your contract
The first solution is to do everything possible to avoid a situation that could expose you to a refusal from the insurer. Here are a few points to consider before signing your disability insurance contract:
- Make sure you know the definition of “disability”. It may differ from insurer to insurer.
- Review the terms of coverage and exclusions carefully. You may find that your occupation is not covered.
- Be aware of the reimbursement limits to avoid unpleasant surprises when paying the benefit.
- Pay attention to the waiting period so you don’t end up with nothing.
Take the time to find the right disability insurance
It’s important to shop around for disability insurance. Of course, this is less obvious with a group insurance plan provided by your employer (although there is nothing that stops you from shopping around for another one). If this is not the case, it is up to you to purchase disability insurance, life insurance or comprehensive insurance.
Example of a company’s refusal to pay for disability insurance
Unfortunately, there are many cases where the insurer refuses to pay the disability insurance benefits claimed by an insured. Here is the story of one such case:
In addition to fighting a battle with brain cancer, one man had to fight his insurance. It turns out that he had just started a new job at a new company where he was on a group long-term disability insurance.
This new insurance was to come into effect some time after he had a visit to his doctor about recurring severe headaches. At the hospital, he was recommended an MRI and anti-inflammatory drugs. The man underwent the examination as soon as possible, just days before the insurance was to take effect.
A month later, the cancer was detected and the disability insurance was activated. While the man underwent many long treatments, he was on disability leave. He was denied compensation by his insurer on the pretext that it was a “pre-existing condition”. This refusal prevented him from receiving $1,750 per month.
The denial is justified by the insurance company because the man began treatment for his cancer (the recurring severe headaches) before his disability insurance coverage was in effect. This is consistent with the pre-existing condition exclusion clause of the policy and justifies a denial.
What to do if you are not satisfied with your insurer’s final decision on your complaint
If you are not satisfied with the final decision made by your insurer regarding your claim, you can contact the specialized lawyers at Accident Solution. Since you have a limited amount of time to take legal action against your insurer, talking to one of our lawyers as soon as possible can make all the difference. The appeal process does not extend your time for recourse. That is why it is important to take action as soon as your insurance company denies your claim.
