Denied Claims Blog

California Slaps Fine on Long Term Disability Insurer for Unfair Claims Denials

October 15, 2011

Insurance companies that provide long-term disability benefits to their policyholders often use tactics to stall the claims they receive. In some cases, the insurance companies deny claims outright without good reason, hoping the policyholder will not fight the decision and will give up the claim.

How Insurance Companies Deny Claims

Insurance companies use many strategies to stall claims and deny payment of long-term disability benefits. For example, an insurance company may repeatedly send its policyholders the wrong forms in hopes that the policyholder will eventually quit and decide not to file. Other insurance companies may tell policyholders they do not have the forms, even if the policyholder submitted them correctly. Insurance companies also interpret “disability” in different ways at different times to confuse policyholders. They employ healthcare providers who make judgments about disability without considering the opinion of the patients’ doctors.

California Fines Insurance Company

According to a California government press release, the state recently fined an insurance company for intentionally creating obstacles to stall policyholders. The fine came about after policyholders filed suit against RiverSource Life Insurance Company for failing to handle their claims accurately and fairly. Plaintiffs argue that the company purposely used tactics to deny long-term care benefits for its policyholders, typically elderly individuals above 70 years of age suffering from Alzheimer’s disease or other conditions.

According to the lawsuit, RiverSource deliberately and systematically put off investigating long-term disability claims. The company also refused to help customers find long-term care in patient facilities, leaving them to guess which locations might be in network. If a patient chose the wrong facility, the company refused to pay the cost of treatment. This dangerous practice left the policyholders vulnerable. Many transferred from one facility to another before finally finding one that would be covered.

RiverSource is expected to pay up to $10,000 for each claim-handling violation and another fine up to $10,000 for each violation of long-term care laws. RiverSource may also pay at least $500,000 for each instance in which they violated a long-term care business practice statute.

How to Overcome Denial Tactics

• Do not let a disability insurer stall your claim.
• Make sure you stay organized and keep all of the information pertaining to your employer, your doctors and your insurance provider.
• Your medical records should also be kept in a safe spot, mainly because the insurance company may accept or deny your application based on what your doctor says about you.
• Make copies of any forms you submit, and record when you sent them. If the form is very important, consider sending via certified mail.
• In addition, keep a copy of your long-term disability policy and make sure you understand all of the terms and conditions outlined within it. Your policy is a binding legal contract. Understanding the terms is vital to protecting your rights.
• Document all conversations and emails you have with anyone regarding your insurance policy and any claims you may make. This includes not only your insurance company, but also your doctor and employer. Write down with whom you spoke, the date and time the conversation took place, what was discussed and what you were told are the next steps.

Contact Us

If you or someone you love was denied long-term disability insurance, contact our attorneys immediately. The time to file a claim is limited, so act now. We will provide you with a free consultation and review of your case, working with you to ensure you receive the benefits you deserve.