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Dawson and Rosenthal
Dawson and Rosenthal

What to Do if Your Disability Insurance Claim is Denied?

Suffering from a disabling injury is incredibly challenging. Any person who has sustained a disabling injury often runs into many challenges, particularly when it comes to their finances. If an injury victim is unable to work, this could mean that they lose their ability to earn an income to support themselves and their families. Here, we want to talk about disability insurance. In particular, we want to discuss what you can do if your disability insurance is denied.

Disability insurance can come in many forms. In some cases, disability insurance is provided by an employer, and this can include short-term disability or long-term disability. Additionally, Social Security Disability Insurance (SSDI) may be available from the federal government, but this is incredibly difficult to qualify for. Lastly, there are many companies that offer private disability insurance policies that a person can choose to purchase.

What to do after a denial?

What you do after denial of a disability claim is largely going to depend on what type of disability coverage you are dealing with. If your long-term disability plan is provided by or paid for by your employer, it is likely governed by the Employee Retirement Income Security Act of 1974 (ERISA).

There are specific provisions in ERISA along with other limitations that require that claimants file administrative appeals in a timely manner before they are allowed to file an ERISA lawsuit against the insurance carrier.

This means that, where applicable, you need to go through the administrative appeals process before a lawsuit can be filed. The administrative appeals process, along with any extensions, can span for extended periods of time.

If the disability insurance policy is not subject to ERISA guidelines, you still need to follow the specific appeals process established by the insurance carrier. However, you may be able to bring an insurance bad faith claim against the insurance carrier quicker against a private insurance carrier.

Finally, if your appeal is based on a denial of Social Security Disability Insurance benefits, you must initiate your appeal in writing within 60 days from receiving the denial letter. The Social Security Administration has very specific guidelines in place for handling denial appeals, and you are also guaranteed the right to representation when seeking SSDI benefits. Additionally, you may not have to pay any direct fees to your attorney, as those fees could be paid out of any past-due benefits that you are owed if your appeal is successful.

Examples of bad faith practices for disability insurance claims

Every state has guidelines that require insurance carriers to handle claims in good faith and fair dealing with policyholders. Unfortunately, there are various types of conduct on the part of the insurance carrier that could rise to the level of bad faith insurance practices. This includes:

  • Deliberately misrepresenting the records or policy language to avoid coverage
  • Unreasonable conduct during litigation
  • Using improper standards when denying a claim
  • Unreasonable demands for proof of loss
  • Coercive or abusive tactics in an attempt to settle the claim
  • Failing to thoroughly investigate a claim in accordance with the insurance policy
  • Deceptive or deliberate misrepresentation of the claim
  • Threatening the policyholder in an effort to get them to drop a claim

This is not an all-inclusive list of the ways that insurance carriers can operate in bad faith. We strongly suggest that you work with a skilled San Diego disability insurance attorney who can evaluate your situation and help you determine the best steps moving forward.