Only select states, including the state of California, permit insureds to file claims against their insurance companies for denying their applications for short or long-term disability in bad faith. To maintain this type of claim, it is insufficient that the insurer has denied your application on the basis that you are ineligible for benefits. Instead, there must be evidence that the insurance company acted in bad faith. An insurance company may act in bad faith when it takes actions or fails to take actions, in putting its interests in front of those of the insured.
Some examples of bad faith on the part of an insurance company in denying disability coverage might include an insurance company that fails to:
· Thoroughly investigate and examine all medical evidence in a disability claim
· Adhere to statutory timeframes and deadlines for responding to the application
· Relying on inconsistent or misleading medical reports as the basis for denying the claim
If individuals win a suit against their insurance companies for denying their claims in bad faith, they may be entitled to damages. These damages may consist of back benefits that you should have received and compensation for debts or losses that you incurred as a result of the wrongful denial of benefits. In some cases, the insurance company may opt to pay you a lump sum in settlement of your claim, rather than paying continuing benefits until the end of your policy period.
Furthermore, in rare cases, individuals may be entitled to an award of punitive damages against the insurance companies, as well. Punitive damages are damages that go above and beyond the damages necessary to compensate the insured for the disability benefits that they should have received or other economically measurable losses. The point of punitive damages is to punish the insurance company for its wrongful behavior of acting in bad faith in denying a claim for disability benefits. Punitive damages also are aimed at deterring other insurance companies from acting in a similarly bad fashion.
Obtaining long-term disability coverage can be essential to protecting your future. When you purchase this coverage, however, you need to be aware of your rights and responsibilities under your long-term disability plan. At Bonnici Law Group, we offer you client-centered representation at all stages of the long-term disability benefit claims process. When you need the kind of help that only an experienced long-term disability benefits attorney can offer you, contact Bonnici Law Group at 619-259-5199 or firstname.lastname@example.org.