Blog - McKennon Law Group

As you already know, paying your insurance premium on time – whether that’s your car insurance, homeowner’s insurance, or life insurance – is of the utmost importance. Staying insured protects you from unpredictable events that often arise in life. But, if you fail to pay your insurance premium, your coverage can lapse and any future claims may be denied, keeping you from the very benefits you intended to get should you need them. Life insurance companies, unfortunately, routinely deny claims due to non-payment of premiums.

It is valid for a life insurance company to deny a claim if you have not paid your premium, as long as they do so for the proper reasons. Not all claim denials are valid, and these decisions can often be appealed. All states have different laws that dictate how insurance companies should handle their customers when insurance companies lapse. California life insurance laws are especially unique, and are best understood with the help of an attorney by your side. If your life insurance claim was denied in California due to not paying your premium, turn to a trusted lawyer from McKennon Law Group.

What Is A Life Insurance Lapse?

When an insurance payment lapse occurs, there is a period of time where you do not have insurance. This happens when an individual stops paying the monthly or quarterly payment for their life insurance premium. The insurance will cancel if it is not being paid, and your coverage therefore will end.

Depending on the unique stipulations of your policy, you may be able to reinstate the policy after a payment lapse if your insurance company permits, and if you meet certain stipulations and requirements. However, if your life insurance lapses, generally speaking, you will be denied your life insurance claim–unless you have the help of a life insurance lawyer.

At McKennon Law Group, we take the time to listen to your situation and provide open, honest advice for next steps. If your life insurance claim was denied due to a lapse in payment, we can communicate with your insurance company and search for any area of opportunity where this decision can be appealed.

What Are The Responsibilities Of The Life Insurance Company?

First and foremost, your insurance company has a responsibility to send you multiple notices if you have been late on your payment or failed to provide your payment at all. Whether it is via email or a standard mail, your insurance company needs to reach out to let you know that you haven’t been making payments and that your insurance will soon lapse. If your life insurance company fails to do so, you may be able to fight back against a denied claim. Adults above age 65 are especially protected by this responsibility. Just like you have a responsibility to pay your premium, your insurance company has a responsibility to keep you informed about the status of that penalty.

Life insurance companies are also required to follow all state and local laws before denying a claim due to a lapsed insurance policy, just as they are required to properly allocate the funds that they receive. Insurance companies are also required to include certain language in their communications that provides details about payments lapses, so that any policyholder clearly understands what could happen if they do not pay their premium.

All life insurance companies are required to operate in good faith. If you feel that your life insurance company in California is acting in bad faith, and has wrongfully denied your life insurance claim, or failed to uphold their responsibilities as your insurer, you have the right to contact a lawyer and hold this company accountable for their action, or lack of action. Our team at McKennon Law Group can help any California resident in this situation. We understand how frustrating it can be to have a denied claim, and take the time to find any possible solution to get you the compensation you deserve.

Schedule A Free Initial Consultation With A Newport Beach Attorney Today If Your Life Insurance Claim Was Denied

With more than 60 years of insurance claims legal experience, the attorneys at McKennon Law Group represent clients in disputes with insurance companies in California and nationwide. Nationally recognized, we have helped hundreds of clients obtain their improperly denied life insurance benefits. We provide free initial consultations to any California resident in need of help with their life insurance premium or a denied life insurance claim.

Schedule a free, no obligation consultation with our Newport Beach life insurance lawyers today to get the help you deserve.

Carpal Tunnel Syndrome may impair your ability to lift, carry, and grip objects. If Carpal Tunnel Syndrome is keeping you from work, you may qualify to obtain long-term disability insurance benefits, but you may need help from a California disability insurance attorney.

Applying for disability insurance benefits for Carpal Tunnel Syndrome is often a challenge because insurance companies often deny Carpal Tunnel Syndrome claims, but a California disability insurance lawyer will fight for your right to your disability insurance benefits.

You need to know what steps to take if you dispute a decision made by your disability insurance company. If you keep reading, you will learn what steps to take, and you will also learn more about your rights as a disability insurance policyholder who is disabled from Carpal Tunnel Syndrome.

What is the Definition of Carpal Tunnel Syndrome?

Carpal Tunnel Syndrome is a physical condition that causes weakness, tingling, and numbness in the arm and in the hand. The cause of Carpal Tunnel Syndrome is pressure on the median nerve, the nerve running through the carpal tunnel on the palm side of the wrist.

Pressure on the median nerve may be caused by repetitive hand or thumb motions, an injury to the hand, or a number of different illnesses. The median nerve sends signals to the muscles at the bottom of your thumb.

If the median nerve is irritated or compressed, you may have Carpal Tunnel Syndrome. Carpal Tunnel Syndrome symptoms begin gradually, with a slight numbness and tingling in the hands or fingers. That numbness and tingling slowly increases and may move through your arm.

Proper treatment usually relieves the tingling and numbness and restores hand and wrist functions. Without treatment, permanent muscle and nerve damage may occur.

Does Carpal Tunnel Syndrome Strike Particular Groups?

A variety of factors make some people more likely than others to suffer from Carpal Tunnel Syndrome:

Conditions like arthritis and diabetes may have an effect on the median nerve.
A wrist fracture or dislocation can place pressure on the median nerve.
Fluid retention and obesity may also increase carpal tunnel pressure.
Kidney failure and thyroid disorders increase the chances of Carpal Tunnel Syndrome.
Prolonged, repetitive wrist flexing or twisting may create median nerve pressure.
Carpal Tunnel Syndrome is more common in women than men.

In many cases, there is no single cause of Carpal Tunnel Syndrome. A combination of risk factors may contribute to the development of the condition.

Are Computers at Fault for Carpal Tunnel Syndrome?

If you routinely use a keyboard, a mouse, or a vibrating tool, it can exacerbate Carpal Tunnel Syndrome and make it difficult to ease the inflammation of the median nerve. Pain and the inability to use your arm or hand fully can make it hard or even impossible to perform your job.

Researchers have looked for a link between computers and Carpal Tunnel Syndrome. Several studies suggest that using a mouse or excessive typing may trigger Carpal Tunnel Syndrome in some patients.

Carpal Tunnel Syndrome Diagnosis and Treatment

Diagnosing Carpal Tunnel Syndrome requires a physical exam and an electromyography test or a nerve conduction study. Several Carpal Tunnel Syndrome treatments are available including corticosteroid injections and non-steroidal anti-inflammatory drugs.

If your Carpal Tunnel Syndrome is caused by a condition like arthritis, treating the arthritis may also help you reduce your Carpal Tunnel Syndrome symptoms. If those symptoms do not respond to any treatments, a Carpal Tunnel Syndrome sufferer may have to undergo surgery.

Are You Eligible for Disability Insurance Benefits?

If you are partially or totally disabled by Carpal Tunnel Syndrome, and if you apply for long-term disability insurance benefits, an insurance company typically will look for evidence suggesting that you are not disabled and will deny your claim for disability insurance benefits.

The insurance company may also conduct interviews with your doctor and your employer to evaluate the validity of your disability claim.

If you have applied for long-term disability insurance benefits and have not heard back from your insurance company for six or eight weeks, you may need to contact the company for a decision. Under ERISA and most state laws, there are strict time limits for making decisions on disability insurance benefit claims.

Intentionally delaying a claim decision is one way that some insurers operate in bad faith. In most situations, until you receive a denial letter, you cannot take any action or file an appeal.

When Should You Contact a Disability Insurance Attorney?

If your insurance company denies your long-term disability insurance claim, your next best move is to contact the best and most experienced California disability insurance attorney who can help you appeal that denial or file a lawsuit. If there has been a substantial delay in deciding your disability insurance claim, you should not wait until your claim is denied in order to seek the advice of a California disability insurance lawyer.

If you have not yet filed a claim for long-term disability insurance benefits, a disability insurance lawyer can help you with the paperwork to ensure that it is complete, accurate, on time, and that there are no misunderstandings or mistakes on your part that could trigger a delay or denial of your benefits. Most disability insurance lawyers do not handle claims prior to an insurer’s denial of a claim so make sure you do your research to find qualified disability insurance attorneys who handle disability insurance claims from their inception.

If Your Claim for Disability Insurance Benefits is Denied, Take These Steps

To dispute a denial of your disability insurance benefits, your first and best move is to contact a disability insurance claims attorney who can assist you with your next move. An experienced disability insurance claims attorney can give you advice regarding whether your claims was improperly denied, whether you should file an appeal or file a lawsuit against your disability insurance attorney.

There are many important decisions that you must make and a California claims insurance attorney can give you the advice you need to take the next steps to protect yourself and your family.

Your Lawyer Can Appeal a Denial of Benefits

If you need to appeal the denial of a disability insurance claim, an appeal begins by reaching out to a disability insurance attorney. Depending on whether ERISA applies to your denied disability claim, you may have only a brief amount of time to appeal a denial of long-term disability insurance benefits, so the sooner you contact a disability insurance lawyer, the better.

It is important to prepare a strong appeal that can withstand the scrutiny of your insurance company. You can file an appeal without a lawyer’s help, but if you make mistakes and your appeal is denied, your remaining options may be significantly limited.

Instead, work with a lawyer who will fight aggressively and effectively on your behalf. If your appeal fails, your lawyer can then file a lawsuit against your insurance company to maximize your chances of receiving your disability insurance benefits.

McKennon Law Group PC has extensive experience handling all types of disability insurance claims, including claims based on Carpal Tunnel Syndrome.

We all pay a substantial amount for insurance. If you become disabled, or if a loved one dies accidentally or otherwise, you expect your insurance company to approve your disability claim or accidental death/life insurance claim quickly.

The policy you hold is a promise from your insurer to be there with the coverage its policy promises when coverage is needed. When you pay for a policy, the company is legally obligated to provide the coverage as it is stated in the policy terms. It is also obligated to handle your claim in a reasonable manner and resolve in good faith any claim you make.

If your insurer does not act in good faith, do not allow it to take advantage of you or to continue to act in bad faith when it handles your claim. By law, insurers cannot avoid their obligation to make a payout on a covered claim or to offer a reasonable and legitimate reason for denying the claim.

How Is Bad Faith Defined?

If your insurance company does not take its legal obligations to you seriously by not handling your claim in a reasonable manner, you may have sufficient grounds for a lawsuit alleging insurance bad faith. A simple denial of your claim is not enough. A bad faith lawsuit must be based on an insurance company’s specific acts or failures.

In California, as in most states, insurers have an obligation to handle all claims reasonably and to pay all legitimate claims. But in practical terms, what does this mean? Below are listed some – but not all – of the reasons why an insurance company may be targeted with a lawsuit that claims bad faith:

Failure to investigate or negotiate your claim in good faith;
Failure to share with you important information;
Failure to provide an explanation for a claim’s denial;
Failure to offer a reasonable settlement in a case where the liability is reasonably clear;
Failure to act on a claim within a reasonable time-frame;
Offering a settlement amount that is less than the value of your claim;
Hiring biased experts to review claims;
Failure to conduct an adequate investigation before denying a claim.

Bad faith insurance practices include prolonging a claim investigation needlessly, coercing or intimidating you into taking an insufficient payout amount, or rejecting your claim for a fabricated or disingenuous reason.

Will a Letter to the Insurance Company Help?

Sending the insurance company a letter – or asking your attorney to send a letter – might be enough to generate some action from the company. When an insurance company knows that you have taken the matter to an attorney, the company is much more likely to begin treating you right.

The potential for legal action may compel an insurance company to make a settlement offer that is reasonable, because if you prevail in court with a bad faith claim, the company may have to pay your attorney’s fees and additional damages over and above the original claim amount. In other words, you will have some leverage with an experienced disability, life or accidental death insurance bad faith attorney involved. As can be seen by our success stories, we have had many successes in taking on insurance companies after we have been hired.

How Can You Help Your Bad Faith Case?

If your case goes to court, you and your insurance attorney will have to offer specific instances of an insurance company’s bad faith. You can help your case by making copies of the pertinent insurance documents and copies of any letters or emails to or from the insurance company.

Also, be sure to maintain a record of any conversations with the company. Take notes that include the time, date, and the name and job title of the individual who spoke with you.

If your case goes to court, you and your insurance attorney will have to prove that by denying your claim, the insurance company was not merely making an honest mistake but was acting unreasonably in making its decision. If you can show that the insurer acted with fraud, oppression or malice, punitive damages may be available.

How Will Your Attorney Prove Your Bad Faith Claim?

A California bad faith insurance attorney will ask your insurance company for the documents and records related to your claim and for other documents detailing the company’s procedures and policies.

The insurance adjuster or another representative of the company may be subpoenaed for a deposition or to testify in a court hearing. In certain cases, an insurance claims attorney may ask an insurance expert to make a statement or testify about insurance industry practices and that expert may be able to comment on whether in his or her opinion, the insurer’s actions were unreasonable and/or violated appropriate industry standards. Case law and State insurance statutes and regulations, such as California’s Fair Claims Regulations, will often provide the appropriate reasonable standards that insurers are required to follow.

If the company did not comply with these standards or even its own practices, procedures, and guidelines, a qualified and experienced bad faith insurance claims lawyer will be able to prove these bad faith claims practices, likely leading to success in your bad faith insurance lawsuit.

When Should You Speak to an Insurance Claims Attorney?<h2

How can you find out if you are dealing with bad faith insurance practices? You could send a complaint to the California Department of Insurance, but we found that our clients who have done so have received no real help.

Realistically, you must consult a California bad faith disability, life, and accidental death insurance lawyer to know if you have sufficient grounds for a bad faith lawsuit and to know if the denial of your claim can be overturned. Schedule a consultation as soon as you suspect that you are dealing with insurance bad faith.

As mentioned above, in the State of California, a plaintiff who succeeds with a bad faith lawsuit may recover attorney fees and compensatory damages (including emotional distress damages), in addition to payment of the original claim. Your first consultation with an attorney is free and entails no obligation.

Do Not Be a Victim Twice

If you have made a claim on an insurance policy, you may be at a difficult point in your life. You may have lost a loved one accidentally, or you may have sustained a severe personal injury that disabled you or you may have become sick and needed medical attention for which you expect to be covered. You should not have to be victimized a second time by an insurance company’s bad faith.

As a policyholder, you have the right to be dealt with in good faith by your insurance company.
If you believe you are the victim of an insurer’s bad faith practices, contact McKennon Law Group PC for a free consultation.

What if you file an insurance claim, and instead of simply denying your claim, your insurance company informs you that your policy has been rescinded? The company may be operating in bad faith. You should arrange to discuss the matter at once with a California insurance claims attorney.

In what circumstances may an insurance company legally rescind your insurance policy? If you believe that your insurance claim was legitimate, do you have any legal recourse against the insurance company? Is there still any way for you to receive the payout the company owes you?

If you continue reading this brief discussion of rescinded insurance policies and bad faith insurance practices, these questions will be answered, and you will learn more about your legal rights as an insurance policyholder in California.

What Is “Rescinding” an Insurance Policy?

When an insurance company “rescinds” a policy, it treats the policy as if it never existed. In practical terms, it means the company is no longer obligated to pay claims for health insurance, life insurance, accidental death insurance, long-term disability insurance, or long-term care insurance.

Insurance companies may rescind an insurance policy in order to deny an insurance claim, but rescinding a policy is different from simply denying a claim. Determining that a policy, in effect, never existed compels the insurance company to refund any premiums that you have already paid.

Why Are Insurance Policies Rescinded?

Rescinding a policy can boost an insurance company’s profits. Rescinding policies eliminates policyholders who seek payouts while the company accepts payments from policyholders who are not seeking payouts. This could leave you with no coverage at precisely the time you need it.

By rescinding a policy, the company is claiming that the policy was invalid from the beginning. California insurance companies may rescind a policy if a policyholder made a false statement on the initial policy application, meaning that the policy was based on a “material falsehood.”

The company may claim, for example, that you denied being a smoker or that you failed to list DUI convictions when you completed the application. When a policy is rescinded, the company must send the policyholder a rescission notice and return the premiums or offer to do so.

When You Purchase a Policy, Take All the Time You Need

If you have purchased a life, accidental death, or disability insurance policy, you know how much paperwork is involved, including policy applications, supplemental applications, personal history questionnaires, policy notices, and medical documents.

You will answer dozens of questions when you purchase a policy. Take all the time you need to consider the questions thoughtfully, and get the answers right. Presume that anything you tell an insurance company could be used against you to deny a claim.

California insurance law requires all questions on disability, life or accidental death insurance applications to be clear, specific, and understandable. You can indicate if you are unsure of or cannot remember the answer to a particular health history or other question.

What Are Your Rights If Your Life, Accidental Death, or Disability Policy Is Rescinded?

Your insurance policy cannot be rescinded if the purportedly false statement made on the application was trivial or irrelevant, or if you did not know that you suffered from a latent medical condition, or if you did not understand the significance of your response at the time.

A policy is rarely rescinded unless you have made a claim. If an insurance company unlawfully rescinds your policy to avoid making a payout that the company owes you, that insurance company is operating in bad faith, and you should consult a lawyer about taking legal action.

Typically, a California insurance claims lawyer will write a letter on your behalf to the insurance company and demand a detailed explanation for the rescission of your policy. Simply by having a lawyer on the case, you will compel some insurance companies to reverse course.

How Will an Life, Accidental Death, or Disability Insurance Claims Attorney Handle Your Case?

If a letter from an insurance claims attorney does not change the insurer’s position, you may be able to take legal action against the insurance company for breach of contract and breach of the implied covenant of good faith for attempting to rescind your insurance policy.

When you turn to your insurer for a payout that you need – and you have faithfully paid the premiums – a denial of coverage that uses rescinding the policy as an excuse can be catastrophic, particularly if you have lost a loved one, if you are in poor health, or if you need long-term disability coverage.

Insurance bad faith laws provide that an insurance company cannot rescind a policy merely to get out of its legal obligation to pay a legitimate insurance claim. When an insurance company does not take its obligation to you seriously, you may have sufficient grounds for legal action.

How Can You Know If You Are an Insurance Bad Faith Victim?

You may submit a complaint about your policy’s rescission to the California Department of Insurance, but only a California insurance claims attorney will be able to tell you if the insurance company was operating in bad faith and whether you have grounds for taking legal action.

A California insurance claims lawyer will provide you with a free, no-obligation initial case evaluation. You will be able to receive the detailed, personalized legal advice that you’ll need, and you’ll be able to make a more informed decision about moving forward with a legal action.

Most insurance claims attorneys in California work on a contingency fee basis, which means that you pay no attorney’s fees until and unless the matter is resolved in your favor. In many bad faith cases, the insurance company will also be ordered by the court to pay your attorney’s fees.

When Should You Contact an Insurance Claims Lawyer?

Particularly if you have lost a loved one or if you are recovering from accidental injuries or from a serious illness, the last thing you need is your insurance company dealing with you in bad faith, complicating your life, and making your days even more difficult.

Some insurance companies in California are operated professionally and provide the services they are supposed to provide, but there are still many insurance companies that place profits above the legitimate claims of their policyholders.

If your insurance policy has been wrongfully rescinded, or if your life, accident, or disability insurance claim has been unreasonably denied, you should fight for the coverage you are owed. Contact an insurance claims lawyer at once to review your options or to begin the legal process.
If you believe you are the victim of an insurer’s bad faith practices, contact McKennon Law Group PC for a free consultation.

You file a claim as the beneficiary of a life insurance policy, which the insurance company denies. What are your rights in this situation? What legal recourse is available to you? First, you should immediately schedule a consultation with a California life insurance claims attorney.

A beneficiary who faithfully pays life insurance premiums for years has a right to expect a full payout. The death of a loved one can cause financial difficulty, and rejection of a life insurance claim can be utterly devastating.

If you are a life insurance beneficiary and your claim has been denied, a California life insurance claims lawyer can determine what legal claims you may have against the insurance company.

Retaining a lawyer allows you to negotiate a settlement with the insurance company, or if it refuses to pay a reasonable settlement amount, to sue it and ask a court to order the payment of your claim.

What Happens When A Life Insurance Claim is Denied?

If you are a beneficiary, the life insurance company may notify you of a denial by letter or phone. A letter from the insurance company may explain a denial by quoting policy language and listing documents it reviewed in the decision-making process.

If the insurance company calls to notify you over the phone that it has denied your claim, request written notification of the denial indicating the date the decision was made and reasons for denial, and ask whether you can appeal the decision. A written decision on the denial of your life insurance claim is required by law.

What Reasons Are Given for Claim Denials?

The reasons an insurance company might give for denying a life insurance claim include but are not limited to:

The policy lapsed or was canceled due to a missed payment.
There was a material misrepresentation of fact on the life insurance application.
The policy was provided through an employer, and coverage was terminated when the employment ended or the employer switched to a different insurance provider.
The policy was for accidental death only, and the death was not accidental.
An exclusion in the policy excludes coverage.

If Your Claim is Denied, Follow These Steps

When an insurance company denies a claim, it is required to send the claimant a letter spelling out in detail the specific reasons for the denial. However, life insurance companies often send denial letters that provide only vague reasons, or none at all, for the denial.

If you receive such a letter, contact the company and request a written list of each specific reason for the denial. Also, ask how to appeal the decision. You may need to gather documents such as medical records, the autopsy report, or receipts for premium payments.

How Will an Insurance Claims Lawyer Handle Your Case?

The next step is contacting a highly qualified life insurance attorney who will review the policy, the stated reasons for denial, and any other pertinent documents.

The attorney will discuss with you how the law applies to your case and will explain your options, which may include appealing the denial decision and/or suing the insurance company. However, many life insurance policies and Employee Retirement Income Security Act of 1974 (ERISA)-governed life insurance policies require at least one administrative appeal before an insured or his/her designated beneficiary may file a lawsuit.

For an administrative appeal, your lawyer will present a case based on the facts and supported by the law. Even if the insurance company upholds the denial, the administrative appeal provides an opportunity for you and your lawyer to begin preparing your case for litigation.

Let an Insurance Claims Lawyer Help You Fight Back

Many insurance companies examine life insurance claims with the intent of paying as little as possible on claims. While some deaths genuinely warrant suspicion, many do not and a significant portion of claims made are valid. If the insurance company acts in bad faith or wrongly delays or denies benefits, the right life insurance lawyer can help.

A life insurance claims lawyer can help you avoid being taken advantage of by a life insurance company. Assessing your insurance situation accurately while you are grieving a loved one’s death can be difficult, and the right lawyer will provide the candid advice and insights you need.

Life insurance claim denial cases are often resolved quickly when your lawyer presents the insurance company with the right documents, evidence and applicable laws. A well-constructed appeal letter also informs the company that you are serious and willing to litigate your claim.

What About Employer-Sponsored Life Insurance?

ERISA is the federal law that regulates life insurance policies provided through employers, and these cases are handled by U.S. District Courts in the federal court system. If the policy you made a claim on was provided through the decedent’s non-government employer, select a lawyer with a record of success handling ERISA claims.

However, if the life insurance policy was not purchased through an employer, a lawsuit against the insurance company will be handled by the state court system and favorable state law will apply. California is especially favorable to life insurance claimants.

The ERISA statutes provide guidelines for how ERISA cases are handled. For example, when you sue under ERISA, your damages may be limited to the amount of your claim, pre-judgment interest and attorney’s fees, and will not include bad faith or punitive damages. Your case will be heard by a federal judge as opposed to a jury.

What Is Insurance Bad Faith?

If the life insurance company mishandles your claim, intentionally or negligently, it may be held accountable for acting in bad faith. Bad faith allegations arise from an insurance company’s specific acts or failures to act. Insurance bad faith includes but is not limited to:

Delaying an investigation for no apparent reason and delaying payment of the life insurance claim.
Denying a life insurance claim for clearly false or fabricated reasons.
Denying a life insurance claim based on an inadequate investigation.
Tricking or intimidating a claimant to take a settlement offer for less than the life insurance claim is worth.

Bringing the Matter to Its Best Possible Conclusion

Your life insurance lawyer may ask the insurance company to produce all documents it has that are pertinent to your claim, and may depose or subpoena a representative of the company.

Your life insurance claims lawyer may also ask an insurance industry expert to make a statement or testify on your behalf regarding standard life insurance procedures and practices. The right attorney will do what it takes to bring the matter to its best possible conclusion.

If your legitimate life insurance claim has been wrongly denied or delayed because an insurance company is acting in bad faith or is simply trying to avoid paying a claim, discuss your claim – at once – with a California life insurance claims lawyer who will help you seek justice.

If you believe you are the victim of an insurer’s bad faith practices, contact McKennon Law Group PC for a free consultation.

Private sector, employer-sponsored insurance plans are regulated by the Employee Retirement Income Security Act of 1974 – ERISA. ERISA is the federal law that establishes the minimum standards for group insurance plans that are offered through private-sector employers. Should your claim for ERISA disability benefits be denied, you will need to have a California ERISA claims attorney challenge that denial on your behalf.

However, under ERISA, before you may bring a lawsuit against an insurance company for denying your claim, you are required to pursue one or more “administrative” appeals through the company. If the appeals fail, only then may you bring a lawsuit challenging the claim denial.

If your own ERISA life, health or disability insurance claim has been denied, and if your administrative appeal does not succeed, what happens when you file a lawsuit to overturn the denial and to obtain your disability insurance benefits?

As we discuss below, there are different review standards used by the courts in these cases, and you will also learn where to turn for the legal help you may need if your own ERISA life, health or disability claim is rejected.

What Is a Standard of Review?

When a lawsuit against an employer or insurance company for denying an ERISA life, health or disability claim gets to court, there is no jury, and even if you can convince the judge that the insurance company was wrong, in some states, your lawsuit still may not prevail – because of the “standard of review.”

Two standards of review may be used by a court in these cases: the “de novo” standard and the “abuse-of-discretion” standard. A court will use one of these review standards when it hears your lawsuit:

To succeed with a lawsuit in a court that uses the abuse-of-discretion review standard, a judge must determine that the insurer was wrong to deny your claim, and the judge also must determine that the company abused its discretion by denying your claim.
To succeed with a lawsuit in a court that uses the de novo standard, the judge, reviewing the administrative record with “fresh eyes,” essentially determines if the insurance company was right or wrong to deny the claim for disability insurance benefits.

In other words, to win under the abuse-of-discretion standard of review, the judge must find that the insurance company’s denial of your life, health or disability claim was so unreasonable that it constituted an abuse of the company’s discretion. This standard of review gives a decided advantage to employers or insurers who deny life, health or disability claims.

But under the de novo review standard, a judge simply decides if the company was right or wrong to deny your claim. This standard of review gives neither party any advantage going into the courtroom. But, a life, health or disability claimant always has the burden of proof.

Why Do Insurance Companies Prefer the Abuse-of-Discretion Standard?

Under the abuse-of-discretion review standard, a court must agree with the employer’s or the insurance company’s denial of your disability claim and its denial of your administrative appeal – unless the company actually “abused” its discretion when it rejected your claim or your appeal.

In recent years, fewer states are allowing insurance companies to hide behind the abuse-of-discretion standard. California and other states now have laws that require courts to use only the de novo standard of review.

If you are seeking ERISA disability or life insurance benefits in California, and if your claim was denied and your appeal also failed, you will in most instances receive a de novo review of your claim if you and your attorney file a lawsuit against your employer or insurance company.

What Does the De Novo Standard Mean?

Even under a de novo review standard, if you have a California life, health or disability ERISA claim, you and your California ERISA claims lawyer still must prove that you are entitled to the ERISA life, health or disability insurance benefits you were denied. The de novo standard, however, lets the court make its determination more fairly and independently than if the abuse-of-discretion review standard applied.

In other words, under a de novo review, the court may consider both the legal and the factual issues about your entitlement to life, health or disability insurance benefits, and the court is not required to give any deference to the plan administrator’s or insurance company’s decision to deny benefits.

This all means that states that have required a de novo review through legislation, such as California, allow courts to make their own decisions in these cases, thus allowing the courts to substitute their own discretion rather than giving deference to the decision of an insurance company or plan administrator who have obvious biases toward denying life, health or disability insurance claims that negatively affect their financial interest.

What is the “Default” Standard of Review and What Standard is Now Used in Most Courts?

The de novo standard of review is the “default” national standard, and it has been since 1989, when the United States Supreme Court held (in Firestone Tire & Rubber Co. v. Bruch) that, by default, claimants are entitled to de novo reviews of ERISA life, health or disability insurance benefit denials.

However, the court also held that the abuse-of-discretion standard may apply if the language of the ERISA-governed plan unambiguously grants the plan administrator or insurance company full “discretionary authority” to determine benefits or to fully interpret the plan’s terms and conditions.

How Does the De Novo Standard Benefit California Consumers?

As explained above, California law prohibits the inclusion of discretionary authority clauses in life, health, and disability plans. The effect of that prohibition is to require California courts to use only the de novo standard of review in all cases that involve fully-insured plans.

Thus, in the words of the Ninth Circuit Court of Appeals (in Abatie v. Alta Health Life Insurance, 2006), the court “must conduct an independent, thorough analysis of the entire administrative record” and “evaluate the persuasiveness of conflicting testimony.”

In fact, to conduct an adequate de novo review, the court may take additional evidence into account by allowing the parties to augment the administrative record to evaluate the credibility of medical opinions or to hear claims that the medical reports in the case are inaccurate. For example, if a disability claimant received a favorable disability opinion from Social Security Administration, courts will typically allow disability claimants to augment the record to include them.

When Do You Need an ERISA Attorney’s Advice and Services?

Would you go to a knee surgeon if you had cancer? Of course not. You need to consult with an experienced ERISA attorney who knows ERISA life, health or disability insurance inside and out. A workers’ comp or personal injury attorney will almost certainly not be familiar with ERISA. You must be represented by a California ERISA life, health or disability insurance claims attorney who has considerable experience advocating for clients who are seeking ERISA insurance benefits.

If you are applying for ERISA life, health or disability insurance benefits – or if your claim has been rejected – you should have the specific and personalized advice that only a lawyer who is familiar with ERISA can provide.

ERISA lawyers usually provide your initial legal consultation at no cost and with no obligation. Your first consultation is your opportunity to obtain the personalized advice you need and to learn how the law applies to your own case and circumstances.

If you are disabled and you are applying for ERISA life, health or disability insurance benefits, or if your claim has been denied, act now. To initiate legal action – or if you need to learn more – contact California ERISA claims lawyers McKennon Law Group PC as quickly as possible.

Will I Be Denied My Life Insurance Claim If My Insurance Lapsed In California?