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What You Don’t Know Can Hurt You When Filing a Disability Insurance Claim

disabilityWhen your life has been disrupted by a serious illness or injury, you count on your disability insurance coverage to help you manage your expenses. Unfortunately, making a claim on such a policy is not as easy as filling out a few forms and letting the insurance carrier know you can no longer work. For most people, making a disability insurance claim is a complex process involving red tape and documentation.

Because the process is so involved, it is easy for the average person to make mistakes that could cost them money — or even lead to a denial of the claim.

Common Errors in Disability Claims
As the claimant, it is your responsibility to provide sufficient evidence to the insurance company regarding your disability. The burden of proof falls to you, and if you fail to provide enough information to meet their standards, there’s a good chance your claim will be denied.

Some of the most common mistakes claimants make include:
• Paperwork errors. Filing insurance claims requires significant amounts of paperwork. Simple mistakes on the claim forms can delay your claim while the insurer tracks down the information. Not answering questions or providing incorrect information can also cause problems in processing your claim. Double check your paperwork to ensure everything is complete and correct before filing.
• Agreeing to additional medical exams. In some cases, your medical records and physician’s statements are not adequate for the insurer, and they may wish to perform an “independent” medical examination to determine the extent of your condition. The problem with these exams is they are often conducted by a doctor who is chosen and paid by the insurance company. In some cases, your policy may specifically prohibit such examinations or include other terms and conditions guiding how they are to be conducted. When you work with a long term disability insurance attorney on your claim, he or she can ensure your rights are protected if you need an independent exam.
• Providing too much information. While you will have to prove your case and provide complete and thorough records, providing too much information can hurt your case as well. You should only supply as much information as needed to answer the questions the insurer asks — no more, no less. In general, it is best to assume the carrier is looking for a reason to deny your claim (even if it’s not the case) and avoid giving information that will make it easy for them to deny. Again, your attorney can provide guidance on how to approach working with the insurer to ensure the best possible outcome.

Understanding Bad Faith
Your insurance policy represents a contract between you and the carrier. You agree to pay the insurer a premium, and the company agrees to pay out should you meet the conditions of the policy. In some cases, the insurer does not want to uphold their end of the agreement — most often for monetary reasons — and will unfairly deny your claim in order to avoid paying what they owe.

Bad faith can take a number of different forms. The insurer might wrongfully deny a legitimate claim as a matter of policy, make unreasonable demands for documentation, delay processing of the claim or improperly investigate the claim. For example, basing the denial on the results of an independent medical exam not in line with the objective evidence from previous findings could constitute bad faith in the form of an improper investigation.

Because an insurer acting in bad faith can have such a devastating effect on your case, and your finances, it is important to thoroughly understand your insurance policy and the company’s promises. By doing so, you can more effectively identify bad faith and avoid serious and lasting consequences. Again, working with a qualified attorney helps you avoid potential pitfalls and keeps the claims process honest.

When you make a claim on your disability insurance policy, it is important you handle everything accurately, or you could face losing thousands of dollars, a drawn out court battle or even a total denial of your claim. Get help understanding the potential pitfalls before you begin the process, and you will have a better chance for a favorable outcome.

About the Author: Attorney Richard Quadrino has devoted his career to helping policyholders in cases against insurance carriers. He is a highly sought after litigator in class action and bad faith insurance cases.