People take disability insurance because it serves as security for their income in case of an injury, illness, or accident that would cause them not to work. It could be through a group or private disability insurance; either way, the policy is meant to give the employee peace of mind when a calamity strikes.
Unfortunately, some disability insurance companies may deny claims to genuine cases, giving unreasonable excuses. Some may even terminate the benefits after some time, leaving the disabled with no income source while still unwell. There are still good insurance companies like the disability insurance in Ontario, which genuinely pays their client’s claims.
What Should You Do Next?
In most cases, when the disability insurance company denies your claims, it is because they determined your policy did not cover your request. Sometimes they can even claim your contributions were not up to date, therefore, rendering the claim invalid. They could even accuse you of fraud.
Whatever the case, the first thing you should do is remain calm. Take a keen look at the rejection letter to understand the reason for denial. If it is because of an administrative or filing error, you will be able to fix it. You can even seek the help of an attorney to help you understand the legal bit.
Reasons for Denial of Claims
A few common reasons that disability insurance companies give to justify their denial of claims are discussed below.
- Lack of coverage: Disability insurance companies will try to convince you that your policy did not cover the kind of claim you are making.
- Expiry of coverage: Most covers do not renew automatically, and forgetting to renew would cause you to lack cover. Therefore, it is wise to read through the policy and identify which plans need renewal and update them when they expire.
- Submission of Incorrect Information: if the disability insurance company finds out that you submitted false information, it will automatically deny your claim and could even sue you for fraud.
- Late notification of the insurance company: Your disability insurance company should be among the first people to notify you immediately you are injured or are admitted to hospital. Most companies have a stipulated timeline within which you should report your case.
- Denial out of bad-faith: Some disability insurance companies will deny your claim for no valid reason. They will give you unreasonable excuses to confuse when it is clear they do not want to honor the request.
What to Do in Case of a Filing or Administrative Error
In case your disability insurance company has made a mistake in denying your claim, the first step should not be filing a lawsuit. If it is an administrative error, it can be settled out of court with the insurance company decently and reasonably.
The first step should be to carefully review the rejection letter, identify their reason for concern, and address the causes. It could involve a simple error like missing evidence or a sign in the claim document.
The insurance company might have keyed your name wrongly or awarded you the wrong policy number. You can therefore ask your disability insurance company to fix this for you before proceeding with the claim.
If the health care service did not send in the correct evidence, request them to correct it and send it back to your insurance company.
How to Appeal the Denial of Claim
Most disability insurance companies give you an option to appeal the denial of a claim. To make a successful appeal, you can also do the following;
- Collect evidence: An attorney can help you collect all the necessary documentation. It could be a medical record stating you cannot work that is approved by your employer or information from close friends and family attesting that you cannot work because of the disability caused.
- Do the necessary paperwork: You receive faster help when using the company’s paperwork than making your application. You can visit the disability insurance company’s website and get their appeal forms. They guide you on the step by step process to appeal.
- Keep a good record: The insurance company handles multiple appeal cases every other time. It is your responsibility to record your file number and all sorts of communication with the insurance company. It makes it easy to provide them as a reference when handling your case.
- Do not give up: Sometimes, your disability insurance company is waiting for you to feel frustrated and give up. Do not fall for this; instead, remain persistent. In most cases, they pay, but after a long and frustrating process.
- Be ready to take the next step: If the disability insurance company fails to honor your appeal and it is genuine, you can seek help from an attorney or a state insurance regulator.
Can you Sue the Disability Insurance Company?
The answer is yes. If the disability insurance company is to blame for the denial, the best thing is to sue. Most insurance companies try to avoid court expenses and will prefer an out of court settlement. Once they see you are not put off by the denial and unreasonable excuses, they will pay your disability benefits.