Blog - McKennon Law Group

Understanding Divorce’s Impact on Potential Life Insurance Benefits

Typically, when policyholders purchase insurance such as life insurance or accidental death and dismemberment insurance, they name one or more beneficiaries to receive benefits under the Policy. A beneficiary is the person who receives the policy benefit payout upon a qualifying event. In the case of life insurance, a benefit is paid if the covered insured passes away in a manner that is covered under the policy.

Many married persons make their spouse the sole beneficiary of these types of policies. That can be true even if the couple has children, as the expectation is that a surviving spouse would use the benefit payout to care for the children too.

However, what happens in this situation if the marriage is over through a divorce and the life insurance policy or the accidental death and dismemberment policy names the divorced spouse as the beneficiary at the time of the insured’s death?

No Automatic Beneficiary Change

It is critical to understand that California law and the law in most states do not automatically effect a change upon divorce. That means that a divorce decree does not automatically remove an ex-spouse as a beneficiary on these policies even if the insured would have wanted removal of the ex-spouse but did not change the beneficiary designation before he passed away.

Typically, if an insured wants a divorce decree to remove his or her spouse as a designated beneficiary, that must be spelled out clearly in the language of the divorce decree/agreement. Couples who are going through a divorce may want to discuss these types of details with their divorce attorneys and with a knowledgeable insurance lawyer. If you have previously gone through a divorce and this type of detail was not included in the decree, you may want to talk to your insurance agent about options for changing beneficiary designations.

Life Insurance Can Be Considered Community Property

Another critical factor that can impact how life insurance policies and payouts work after a divorce is the fact that these types of policies might be considered community property. If you or your spouse purchased the policy during your marriage—and particularly if you paid the premiums for the policy with communal assets—the policy is likely to be considered community property during a divorce.

This can be an important consideration, as it can drastically change the total value you get from the policy. Consider a hypothetical example where a husband purchases a policy on his own life and names his wife as beneficiary. The policy is for $1 million in benefits, and when the couple gets divorced, the cash value in the policy is $100,000.

One potential outcome in the case is that the court decides the policy is community property. It may award ownership of the policy to the husband but require him to give up $50,000 in cash assets to ensure equitable distribution of the current cash value. At that time, the husband could change the beneficiary on the policy, and the ex-wife is potentially out a million dollars later in life.

The Requirement for One Spouse to Maintain a Life Insurance Policy With the Other Spouse as Beneficiary

In some cases, courts may order or the parties may agree that one spouse to carry life insurance in the future for a specific time, for a specific amount and that other divorcing spouse is named as a sole or partial beneficiary. This might occur when one spouse makes a lot more money and has been the de facto breadwinner in the family. A life insurance policy can help ensure that child support and other dependent needs are covered if the insured spouse passes away.

Updating Your Life Insurance Policies

Divorced spouses likely will want to make changes to your life insurance policy. They should talk with their insurance agent and their divorce attorneys involved before they move ahead with those changes. They will want to ensure that they are making legal, intelligent changes so there is less likelihood that the changes might be called into question later. That is true even if you are only updating your beneficiary designations.

What to Do if You Run Into Problems With a Life Insurance Claim Post Divorce

Many people think of life insurance as a fairly straightforward purchase. You buy the coverage, and if you pass away while the coverage is still in force, your beneficiary receives a cash benefit. Unfortunately, it does not always work as simply as you might think it should.

There are many reasons that an insurance company might balk at processing a payout. After all, the insurance company has a bottom line to protect, and paying out every claim that is filed is not the way to do that. If an insurance company can find a legal reason to deny a claim, you can count on the fact that it will do so.

Any time there are extra mitigating factors, such as potential questions about who a beneficiary might be or whether a beneficiary change was legal, it can hold up a payout or even put a claim in jeopardy.

If you believe you are the rightful beneficiary for a life insurance policy and the insurance company is not acting in good faith or is otherwise failing to pay the claim, you may need additional help. Experienced life insurance and accidental death insurance lawyers who understand the these issues can fight to protect your rights and increase the chance that you get the benefits you deserve.

For more information about how we can help you, call us today. The McKennon Law Group PC has fought many life insurance companies and we have been highly successful.

The Employee Retirement Income Security Act of 1974 (“ERISA”) governs most of the American public’s employee benefit plans, insurance, and pension benefits. It applies to most medical insurance, disability insurance, life insurance, and pension benefits held by Americans. Unfortunately, disputes over entitlement to benefits arise frequently. Even after engaging in lengthy administrative appeals, the disputes are often left unresolved. The claimant’s only recourse is to file a lawsuit. But, a plan participant must be cautious because, if they wait too long, they may lose the right to sue and be forever barred from obtaining their benefits. The most important deadline to sue over a denied claim is called the statute of limitations. Understanding the applicable statute of limitations for an ERISA claim is thus important.

When seeking benefits under a plan governed by ERISA, the two most important types of claims are claims under 29 U.S.C. Section 1132(a)(1)(B) to obtain improperly denied benefits and claims under 29 U.S.C. Section 1132(a)(3)(B) for breach of fiduciary duty and equitable relief. These two kinds of claims are very different. One seeks to have the court rule that the claim for benefits was improperly denied under the terms of the ERISA plan at issue. The other seeks to establish that the claimant was harmed because the defendant breached its legal duties in some other manner and is therefore entitled to equitable relief. Both types of claims have been addressed elsewhere in related blogs on our website. This article will instead focus on how the two claims have distinctly different statute of limitation .

ERISA does not provide a statute of limitations for claims under Section 1132(a)(1)(B). Instead, courts apply the limitations period provided by the most analogous state statute: a breach of contract claim. See Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d 643 (9th Cir. 2000) (en banc). In California, that is four years. Other states may differ.

The statute of limitations is to be contrasted with the ERISA plan’s stated contractual limitations provision that also must be complied with. Most employee benefit plans contain a provision that differs from a traditional statute of limitations. In California, California Insurance Code section 10350.7 sets the time as “90 days after the termination of the period for which the insurer is liable” in disability plans. In Heimeshoff v. Hartford Life and Accident Insurance Co., 571 U.S. 99 (2013), the Supreme Court upheld such provisions. The Supreme Court determined that a contractual limitations provision is enforceable unless there is “a controlling statute to the contrary” or the period is unreasonable. Heimeshoff, 571 U.S. at 102, 105-06. Contractual limitations periods of a mere 180 days after the claim denial have been held to be reasonable. See Sargent v. S. Cal. Edison 401(k) Savings Plan, 2020 WL 6060411, at *6 (S.D. Cal. 2020)

Importantly, when denying an appeal for benefits under an ERISA plan, the claims administrator is required to provide notice of the relevant contractual limitations period. See Santana-Diaz v. Metropolitan Life Ins. Co., 816 F.3d 172, 182-83 (1st Cir. 2016). In Santana-Diaz, the First Circuit Court of Appeals ruled that the failure to provide notice of a contractual limitations period in a denial letter rendered it unenforceable to that particular claimant. See id.

Statute of limitations for breach of fiduciary duty claims under 29 U.S.C. Section 1132(a)(3)(B) are more complicated than those for breach of plan benefits. They are controlled by a federal statute: 29 U.S.C. Section 1113. It provides as follows:

No action may be commenced under this subchapter with respect to a fiduciary’s breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of—

(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or

(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;

except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.

Section 1113 states that a plan participant or beneficiary cannot bring a claim for breach of fiduciary duty later than either six years after the last action that constituted part of the breach of fiduciary duty, or three years after the claimant had actual knowledge of the breach, whichever is earlier. This can produce complicated and unjust situations. What if the breach occurred a decade before the harmed person learned of it? Section 1113 contains a fraud or concealment exception that stops the statute of limitations from beginning to run under certain circumstances. If the defendant actively tried to conceal their breach, then the statute of limitations is tolled until the date of discovery of the breach or violation. However, the exception’s application under other circumstances is less clear. In Barker v. American Mobile Power Corp., 64 F.3d 1397, 1402 (9th Cir. 1995), the Ninth Circuit addressed this issue. The court considered the fraud or concealment exception and found that the plaintiffs in that case had failed to invoke the exception because they failed to allege that defendants “committed specific acts of fraud or concealment.” Id. However, the court also acknowledged that:

Substantial authority indicates, however, that the exception applies only when the defendant himself has taken steps to hide his breach of fiduciary duty. Other circuits have held that the “fraud or concealment” exception in the statute incorporates the common law doctrine of “fraudulent concealment.” See Larson v. Northrop Corp., 21 F.3d 1164, 1172-3 (D.C.Cir.1994); Radiology Ctr., 919 F.2d at 1220; Schaefer v. Arkansas Medical Soc’y, 853 F.2d 1487, 1491 (8th Cir.1988). Under that doctrine, a statute of limitations may be tolled only if the plaintiff “establishes ‘affirmative conduct upon the part of the defendant which would, under the circumstances of the case, lead a reasonable person to believe that he did not have a claim for relief.’” Volk v. D.A. Davidson & Co., 816 F.2d 1406, 1415 (9th Cir. 1987) (emphasis added) (quoting Gibson v. United States, 781 F.2d 1334, 1345 (9th Cir. 1986), cert. denied, 479 U.S. 1054, 107 S.Ct. 928, 93 L.Ed.2d 979 (1987)); see Greenwald v. Manko, 840 F.Supp. 198, 203 (E.D.N.Y. 1993)

Id. at 1402. In short, the courts of appeal are inconsistent when determining whether a defendant must commit affirmative acts to conceal the improper conduct or whether conduct that simply prevents the claimant from knowing that they have a claim is sufficient. The need to isolate the underlying conduct that constitutes the violation further complicates these circumstances and is particularly problematic for the average plan participant.

This raises an additional question: Do contractual limitations periods affect claims for breach of fiduciary duty? The courts have yet to reach a consensus on this issue. Heimeshoff addressed improper denial of benefits claims. Its application to breach of fiduciary duty claims is the issue debated by the courts. Some courts have held that a contractual provision applies to a breach of fiduciary duty claim. Others have rejected that position. As of 2020, “In the seven plus years since Heimeshoff was decided, four of the eight courts that have considered this narrow issue have held that § 1113 controls.” Falberg v. Goldman Sachs Group, Inc., 2020 WL 7695711, at *4 (S.D.N.Y. 2020). Of note, however, other cases have simply ruled in a manner that implicitly holds that the contractual limitations period does not apply. See, e.g., Clark v. Provident Life, 2016 WL 11744945 (C.D. Cal. 2016); Zelhofer v. Metropolitan Life Ins. Co., 2017 WL 1166134 (E.D. Cal. 2017). The majority position is that statute of limitations provisions in a plan document do not control breach of fiduciary duty claims.

Statute of limitations and contractual limitations periods can be very complicated in their application. Whereas a claimant is supposed to be informed of the applicable deadline, claims administrators never inform claimants about the applicable statute of limitations for breach of fiduciary duty claims. At times, they also fail to address the applicable statute of limitations for an improper denial of benefits claim. The wisest course of action is to seek the assistance of experienced ERISA lawyers like McKennon Law Group PC as soon as the claim has been denied, if not beforehand. Key deadlines can be missed, and, once missed, there is little that even a skilled attorney can do to help.

The passage of the Retirement Equity Act (“REA”) in 1984 marked a transformative shift in how retirement benefits are handled in cases of divorce, particularly for spouses who relied on their partner’s income for financial security. Prior to the REA, the Employee Retirement Income Security Act of 1974 (“ERISA”) protected retirement funds from any form of assignment, leaving spouses vulnerable to losing their share of benefits during a divorce settlement. The REA’s introduction of Qualified Domestic Relations Orders (“QDRO”s) offered a critical solution, it permitted QDROs to supersede ERISA’s anti-assignment rules, allowing for equitable division of retirement assets under court orders while upholding ERISA’s overarching goals. The question of what is a QRDO, especially what makes it “qualified,” was the subject of a recent decision by the Ninth Circuit Court of Appeals in Hartford Life & Accident Ins. Co. v. Valois, No. 23-3286, __ F. App’x __, 2024 WL 4678055 (9th Cir. Nov. 5, 2024).

Marilyne Valois was the named beneficiary on a Hartford Life and Accident Insurance Company insurance policy owned by her boyfriend, the decedent, which was the one and only life insurance policy he owned. Haili Kowalski had previously been married to the decedent and separated from him. Kowalski and the decedent had a Legal Separation Agreement (“LSA”) which required him to maintain a life insurance policy in the amount of $800,000 with Kowalski’s minor son as beneficiary. Upon the decedent’s death, Kowalski and Valois both made competing claims to the benefits of the Hartford policy and Hartford filed an interpleader action for the court to determine the proper beneficiary. Valois contended that the Kowalskis’ separation agreement was invalid because it did not “clearly identify” the Hartford benefit plan, or any plan whatsoever, and merely required the decedent to “carry and maintain a policy of life insurance.” Valois also argued that because the decedent was only eligible for $493,000 in life insurance coverage, the separation agreement’s $800,000 requirement “required the plan to provide increased benefits.”

The district court disagreed with both of these arguments, ruled that the separation agreement was an enforceable QDRO. Therefore, Kowalski’s son had superior rights over Valois to the Hartford policy benefits based on the terms of the LSA. The court issued judgment in Kowalski’s favor.

Valois appealed to the Ninth Circuit Court of Appeals and took the position that the LSA was not a QDRO under ERISA because the LSA did not clearly specify the Hartford policy and she should thus receive the Hartford benefits as the named beneficiary. ERISA requires a QDRO to clearly specify each plan to which the it applies. 29 U.S.C. § 1056(d)(3)(C)(iv). However, courts require only “substantial compliance” with ERISA’s specificity requirements. Hamilton v. Wash. State Plumbing & Pipefitting Indus. Pension Plan, 433 F.3d 1091, 1097 (9th Cir. 2006) 3 23-3286 (citing Trs. of Dirs. Guild of Am.-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 420 (9th Cir. 2000)).

The Ninth Circuit affirmed the district court’s decision, holding that the LSA was compliant with ERISA’s requirements and was a valid QDRO. The Ninth Circuit reasoned that the purpose of ERISA’s specificity requirements is to avoid uncertainty related to a beneficiary’s identity. Because the decedent had one life insurance policy, the Hartford policy at issue, there was no doubt as to which policy was referred to in the LSA. The terms of the LSA were clear in requiring Kowalski’s son to be the beneficiary of the policy, thus his right to the Hartford benefit was superior to Valois’ claim despite her being the named beneficiary on the policy.

Valois also argued that the LSA was not a QDRO because it increased the Hartford’s payment burden and a QDRO must not “require a plan to provide increased benefits.” 29 U.S.C. § 1056(d)(3)(D)(ii). However, the Hartford benefits under the plan were $493,000, substantially less than the $800,000 required by the LSA. The court noted that the LSA was an agreement between Kowalski and the decedent, to which Hartford was not a party, that the LSA did not require Hartford to pay any more than the plan benefit ($493,000), and that Kowalski was not requesting more than the Hartford plan allowed, and the LSA therefore did not require Hartford to provide increased benefits.

Because the Hartford policy at issue here was the decedent’s only life insurance policy, there was no possibility of confusing it with another policy. Therefore, even though the LSA did not clearly specify the Hartford policy, it did not raise any question as to which policy to which it might be referring, and was considered to be a valid QDRO and therefore subject to ERISA, despite the decedent presumably naming Valois as the beneficiary.

Why Timing Matters for an ERISA Claim and What Timelines You May Need to Consider

The Employment Retirement Income Security Act of 1974 (ERISA) provides specific requirements for how most group employee benefits plans are administered. Plans that may fall under the purview of ERISA include retirement/pension, health insurance, disability insurance, life insurance, and accidental death & dismemberment insurance. ERISA protections help reduce issues related to insurance bad faith and ensure employees receive the benefits they were promised as part of their compensation packages. The ERISA regulations set out certain important timelines that insurers and claims administrators must follow. Understanding the various timelines that relate to such claims can help ERISA plan participants avoid some common issues that might increase their chance of denial or a loss in court if they need to take the matter that far.

Are There Statutes of Limitations for ERISA Claims?

Whether or not ERISA claims are subject to an applicable statute of limitations is a complex consideration. The statute of limitations for ERISA claims varies depending on the type of claim. For breach of fiduciary duty claims under ERISA, the statute of limitations is generally six years from the date of the last action that constituted a part of the breach or violation, or three years from the date the plaintiff had actual knowledge of the breach or violation, whichever is earlier (29 U.S.C. § 1113). In cases involving fraud or concealment, the statute of limitations is extended to six years from the date of discovery of the breach or violation (29 U.S.C. § 1113).

For ERISA claims that do not involve fiduciary breaches, courts typically apply the most analogous state statute of limitations. For example, claims for denial of benefits under ERISA Section 502(a)(1)(B) are often treated as breach of contract claims, and the applicable statute of limitations is determined by the applicable state law governing contract actions.

The ERISA plan at issue will normally have a contractual limitations period that is the same or shorter than the applicable state law statute of limitations discussed above. If it is shorter, then a claimant would also have to meet this deadline in addition to the applicable statute of limitations period. This limitations period is typically three years from the date a notice of claim must be made under the plan. If you are not sure what the deadlines for filing ERISA claims are in your case, it may be a good idea to consult with an ERISA benefits attorney who can help ensure you file on time.

Must Your Insurance Company Operate on Certain Timelines?

Yes, ERISA timelines are dictated by the law and by the plan. Typically, plans must provide decisions about claims within a specific period of time, such as 45 days. They cannot simply ignore a claim and hope that you forget about it. However, plans can drag out the process of paying a claim by asking for additional documentation or requesting an extension. In most cases, the plan has to provide a reason for these requests, though it might simply be that it needs more time to gather or review information. The exact timeline for claims will depend on the type of coverage you have and the details of your plan agreement.

Deadlines for ERISA-Related Appeals

If your ERISA claim is denied, you can typically appeal it and must appeal it prior to filing a lawsuit. However, you must file the appeal by the relevant deadline. Again, the deadline will differ depending on the type of claim you are dealing with and the details of your plan. Commonly, appeals deadlines are 60 to 180 days from when a denial is issued or received. A lawyer experienced in dealing with ERISA cases can help you understand what the deadline is for your appeal. They can also help you gather information during that time to ensure the strongest appeal possible.

Under ERISA, a participant has at least 180 days following receipt of a notification of an adverse benefit determination to file an appeal concerning disability insurance claims. If the final day of the 180-day period falls on a Saturday, Sunday, or legal holiday, the deadline is extended to the next business day. For disability benefits, the plan must resolve a claimant’s appeal within 45 days, with one 45-day extension available for if the insurer can establish special circumstances exist for the extension. The deadline for filing an administrative appeal on a denied accidental death insurance claim is 60 days from the date of the written denial. Missing an administrative appeal deadline is as fatal to a claim as the passing of a statute of limitations with very few exceptions.

Timeline for Filing a Lawsuit After an ERISA Claim Denial

In most cases, you must go through all administrative options regarding an ERISA claim before you can file a lawsuit in the matter. This means filing a timely claim, filing a timely appeal if that claim is denied, and exhausting all appeal options. Once you do that, you may have an option to file a lawsuit if you believe you can demonstrate that the insurance company improperly denied your claim. An ERISA lawyer can help you understand what type of case you may be able to build for a lawsuit. Typically, these suits are governed by a three-year statute of limitations.

Working With an Attorney to Meet ERISA Deadlines

Timeliness is critical to success when dealing with ERISA claims. An experienced legal team can help you meet deadlines and adhere to important timelines with your ERISA claims. Some ways a legal team can help include:

Ensuring you understand the timelines in question. ERISA claims can be complex, and the information about deadlines you might find online can be confusing. Because so much depends on your individual plan and type of claim, it is important to ensure you are working with the right facts.
Helping you build your case. Whether you have a few days or a few months before a timeline, an experienced ERISA attorney can help you build a case and complete the necessary paperwork and filings to ensure your claim or lawsuit is filed within deadlines.
Supporting you throughout the process. Filing a claim or lawsuit is often just the beginning of your journey with an ERISA claim. An experienced legal team provides support for you throughout the process to reduce some stress and burden at a time when you are likely facing other stresses in life. A legal team can gather documents and information on your behalf, depose witnesses to learn important information for your case, review filings and claims paperwork, and negotiate with insurance companies.

If you are dealing with an ERISA claim or believe you are not being treated fairly by an insurance company or employer benefits plan, our team can help. Contact McKennon Law Group PC to set up an appointment and find out how our team fights for you.

The article outlines the economic implications of ERISA disability cases for both claimants and plan administrators. Claimants face lost wages and financial distress due to their inability to work, affecting them and their families. Plan administrators incur administrative expenses in managing claims, reviews, and appeals. ERISA was enacted to protect employee benefit plan participants, adding complexity and economic considerations to disability insurance cases.

ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries. Along with pension plans, ERISA also governs disability and life insurance plans offered by employers. Navigating an ERISA disability case can be complex and fraught with economic considerations that affect both the claimant and the plan administrator, and thus may have significant implications for both parties. Claimants and plan administrators alike can be heavily affected by various costs.

For claimants, costs include:

Medical Expenses: Claimants often face significant medical expenses related to their disabilities. These costs can include ongoing treatments, medications, rehabilitation, and other healthcare services. The financial burden of these expenses can be overwhelming, making the need for disability benefits even more critical.

Legal Fees: Pursuing benefits through an ERISA claim often requires legal assistance. Attorney fees can vary widely, but they are typically structured as contingency fees, meaning the attorney is compensated only if the claimant wins their case. Consider that disability benefits already amount to only a portion of a claimant’s income before attorney fees are paid.

Lost Wages: The primary purpose of disability benefits is to replace lost income due to an inability to work. Claimants may face immediate financial distress, particularly if they are unable to return to their previous employment. This loss can affect not only individual claimants but also their families, adding to the emotional and financial strain.

Costs for plan administrators include:

Administrative Expenses: Employers and insurers managing ERISA plans incur administrative costs, which include processing claims, conducting reviews, managing appeals. These costs can be significant, particularly for larger organizations that handle numerous claims.

Legal Fees and Settlements: When a claim is disputed, employers may incur legal fees defending against claims. If a case escalates to litigation, costs are incurred. Additionally, settlements represent a financial liability, particularly if they involve long-term benefit payments.

Impact on Insurance Premiums: High volumes of claims can lead to increased premiums for employers, affecting their overall financial health. Insurance providers may raise rates or adjust their underwriting practices in response to higher claim rates, impacting the employer’s bottom line.

Recoveries for claimants may involve the following:

Monthly Disability Benefits: For successful claimants, ERISA disability benefits can provide a vital source of income. The monthly payments can replace a significant portion of lost wages, offering financial stability during a challenging period.

Lump-Sum Settlements: In some cases, claimants may negotiate a lump-sum settlement. This approach can provide immediate financial relief and allow claimants to plan for future expenses. However, it is essential to weigh the pros and cons, as a lump-sum settlement may be less than the total value of ongoing benefits, even when considering net present value.

Back Benefits and Interest: Claimants may also be entitled to back benefits, along with interest, covering the period from when they became disabled to when the claim is approved. This can provide a substantial financial boost, especially if the claimant has been waiting for approval for an extended period.

Recovery of Attorney’s Fees and Costs: For successful claimants, they may recover the attorney’s fees and costs they incurred from the insurers who denied their claims. This will typically allow the disability claimants to keep all or most of their disability benefits (depending on the fee agreement they have with their attorneys). Experienced disability attorneys such as McKennon Law Group PC often collect attorney’s fees and costs when they achieve success in their ERISA disability cases.

The economics of an ERISA disability case is multifaceted, involving direct costs for claimants, administrative expenses for employers, and long-term financial implications for both parties. Understanding these economic dynamics is crucial for effective navigation of the ERISA landscape. Claimants must weigh the potential benefits against the costs, while employers should consider the broader implications of their disability policies. In this complex environment, informed decision-making can help both claimants and employers achieve favorable outcomes. If you or a loved one have made an ERISA claim for disability benefits or are considering doing so, and if you are looking for the best disability lawyers in California, the experienced attorneys at McKennon Law Group PC can help you navigate these complexities. Reach out to McKennon Law Group PC for a free consultation.

Is Your Disability Insurer Watching You?

When you file a disability claim with your insurance company requesting that it pay you monthly disability benefits, it will take all necessary steps to try to disprove your claim. If, for example, you assert that you cannot work due to sickness or injury that causes your inability to work in your occupation or any other occupation, the insurance company may try to show that this is not the case because of the activities you engage in regularly. To do that, the insurance company may engage in surveillance tactics without your knowledge to watch your daily activities.

Insurers who conduct surveillance do not automatically engage in bad-faith conduct. They have a right to protect their bottom line and shareholders by conducting reasonable investigation of claims. Nonetheless, it is important to understand what tactics the insurance company might use and how to protect your rights and your claim.

Physical Surveillance by an Investigator

Disability insurers normally hire undercover private investigators who film you during the day and night. These individuals must adhere to privacy laws, which means they cannot take videos or pictures of you at certain times and in certain locations, such as inside your home, without your permission. However, they can generally capture video and photographs of you outside or in public, and they can record their own observations about what you do and when you do it. Video surveillance is conducted mostly at and around your home and will include your travel to locations near your home when you travel away from it.

Surveillance and Invited Investigations at Your Home

Insurers often conduct surveillance of your home and sometimes they set up a visit to your home to ask you questions. If you invite this person into your home, they have access to your private areas that can be seen from the area in which you invited them. Anything they note while inside the home can be documented for use in an insurance case.

This may not seem like it is very important, but something the representative sees in or around your home while he or she is there might call into question your entire disability claim. For instance, if you are the only person who lives in the home and you have claimed that you cannot work due to physical disabilities and limited mobility, the insurance company might question why its representative saw a mountain bike that seemed recently used in your home.

Video Evidence Can Be Damning to Your Claim or It Can Assist in Proving It

Insurance companies can and often do use video evidence from surveillance as evidence against your case or claim, especially if the matter goes to court. The insurance company might try to gather video footage from traffic cameras or other sources that show you doing things that seem to indicate you would have no trouble working or that your disability or injury is not as serious as you claim. In some cases, insurance companies might try to subpoena video evidence from other cameras, including personal cell phones.

Social Media Investigations

If you use or own social media accounts, these can and will be investigated by your disability insurer to determine if anything you post (whether written or photographic) is inconsistent with your disability claim and the representations you make about your claim. Your own Facebook, Instagram, X, or TikTok account could give your insurance company evidence they might use against you. Some insurance companies engage in social media investigations, which means they hire trained professionals to monitor your accounts.

This is an important consideration, as you must be careful what you share online. You cannot just ensure you keep your photographs and other information to “friends only,” either, as nothing on the internet is completely private.

Consider a hypothetical case where a disability claimant is dealing with extreme back pain and cannot work. However, through the use of medication, days of rest before and after, and help from others, she is able to attend an important family event, where she is seen walking, bending and sitting without any noticeable pain. A disability insurer might try to use pictures and videos to deny your claim, though the pictures do not tell the entire story of what those few hours might have cost the individual after the event is over.

If you use social media platforms, you may also want to select settings that keep people from tagging you in pictures and posts. This helps reduce the chance that others might add information or images to your profile that are damaging to your case. McKennon Law Group PC believes that these types of investigations are so important that it provides all of its disability clients with a Social Media Questionnaire and Warnings document they are required to complete.

Background Checks and General Research

Insurance companies also conduct background checks and research into your life before and after any injury or disability. Investigators may look for information about your previous jobs, where you have lived in the past, who you have lived with, and what your interests and hobbies are. All of this information can inform the rest of their research or the strategy they take in surveilling you in the future.

For example, if background research shows that someone was an avid hunter or hiker, investigators may be on the lookout for evidence that the individual is engaging in these activities despite their claimed disability.

How a Disability Lawyer Can Help

Knowing that an insurance company or investigator might be watching you—literally and figuratively—can be stressful. That is a stress you certainly do not need to pile on in an already stressful time, but it is important to understand what actions might weaken your case and how to protect your rights, privacy, and case.

An experienced disability attorney can help with all of that. At McKennon Law Group, PC, we work hard to protect our clients from bad-faith insurance actions. We also provide guidance throughout your claim and case process so you can live more confidently knowing you are working in the best interests of your case.

How a Previous Divorce Can Impact Your Life Insurance Claim