If you have a claim that has been wrongfully denied or are currently in the claims handling process, it is important to always keep in mind the potential impact of your conduct on future litigation. When dealing with a sophisticated insurance company, you want to put your best claim forward and be prepared for the potential need to file a lawsuit. In this article, we discuss our top eight tips for when you take your insurer to court, from the importance of hiring an attorney with relevant experience to preparing for the long haul that is litigation against an insurance company.
1. Hire an attorney with experience in insurance litigation who actually goes to trial.
This may seem like a given, but insurance law is a complex and requires an experienced insurance litigation attorney to understand its nuances. Even at the outset, before litigation begins, fundamental legal questions dictate an insurer’s conduct. These legal questions should also alter the way you, as the insured or plan participant, approach the matter. For example, if you receive long-term disability benefits through your employer, your claim may be governed by the stringent, pre-litigation procedures of the Employee Retirement Income Security Act of 1974, otherwise known as “ERISA.” ERISA requires that you exhaust an administrative process, but it also affects the amount of money at stake, which you will have to consider before filing suit.
An experienced insurance attorney understands these nuances and importantly, how it alters an insurer’s approach to the matter. And, look for an attorney who actually goes to trial and does not settle all of his or her cases. We know many attorneys who handle life, health and disability insurance claims who claim to have a big reputation, but who never go to trial. If your attorney has a reputation for being afraid of trial, this will likely greatly affect the recovery you get. Insurers are in the business of assessing risk and they do this with your claim and your counsel. If you have an attorney who is willing to go to trial, the insurer will assess the risk much more favorably, impacting your recovery through settlement. Having an experienced advocate on your side early on the claim process can significantly impact the likelihood of success and help you understand the status of your claim. Let the insurer know you mean business, do your research and hire an experienced attorney with a proven track record, and it can make all the difference.
2. If you feel the insurer wrongfully denied your claim, seriously consider legal recourse.
People buy insurance for a variety of reasons, but typically, an individual or entity purchases insurance to protect itself from an unknown, future risk. You pay a premium for that protection against uncertainty, and share that risk across a pool of other, similarly situated insureds. Ideally, you avoid the future risk entirely, but in the unfortunate circumstance that you do not, you understandably expect your insurer to pay as promised. In other words, you expect the insurer to provide the insurance you paid premiums on for years, not delay and then wrongfully and in bad faith deny your claim.
If your benefits were not paid despite your cooperation throughout the process, your claim may have been wrongfully denied. If so, do not be afraid to seriously consider legal options and pursue those benefits. The insurer certainly consulted with legal counsel in drafting the insurance policy and structuring its claims handling process; do not be afraid to protect the benefits you paid for and do the same.
3. Meticulously document your communications with the insurer.
You must meticulously document all of your communications with the insurer and if you have a plan through your employer, this should also include all conversations with your employer. For every communication, get a name, telephone number, and what you discussed.
This is important because you want to be able to easily refer to an accurate timeline of events. Further, you can be absolutely sure that even if you are not documenting communications meticulously, your insurer is doing so. Insurers record, log and summarize every communication in your “claim file” in a detailed, organized manner. At the end of the day, if you remember a communication or conversation differently (or do not remember it at all), it will be difficult to support without a record of your own.
4. Meticulously document details regarding your claim.
Same goes for all documents sent to and received by the insurer or employer in support of your claim. This does not just include the letters from the insurer and your letters in response, it should also include any enclosures you send with the letters, a copy of any claim forms you filled out, etc. Keep a chronology of all actions you take concerning your claim.
This applies to everything the insurer receives regarding your claim. Often, the insurer needs medical records or other evidentiary support, such as pictures, x-rays, or other materials. Although the insurer will likely independently seek these records, keep a copy for your own records as well.
5. Prepare your case for appeal or litigation.
Preparing for a fight with your insurer is critically important. Keep copies of everything pertaining to your claim and maintain a back copy, so that if one set is ruined by calamity, at least you will have another backup (best if it’s electronic). Unless your case is governed by ERISA, this may be your only record of events until the insurer’s copy is subject to discovery. If the benefits at issue are very important to you, then you must make failsafe record keeping a priority. Organize your file and make it accessible for your attorney. Be available to discuss all aspects of your claim with your attorney. If you wish to claim damages beyond what your policy benefits provide, gather the evidence and present it in a compelling and organized manner for your attorney.
6. Be honest, straightforward, precise and nice.
When an insurer asks you a question, be honest, straightforward and precise in your answer. If you overstate your claim, it can be difficult to overcome later. For example, in disability insurance claims insurers often ask the insured to fill out a claim form that indicates the limitations and restrictions as recommended by your physician. Often, the form itself invites confusion, but for the sake of argument, let’s assume the form asks whether you can walk or drive. If your ability to walk is limited to two fifteen-minute intervals for a total of thirty-minutes in an eight-hour work day, say that. If you can drive only occasionally for 10 minutes a day, do not state you do not and cannot drive. Be precise.
Also remember to be nice, but firm. In other words, be polite even when the situation is incredibly frustrating, because everything is recorded and could potentially be focused upon in front of a jury. If you get angry, scream profanities and personal insults at the employee handling the claim, and threaten a lawsuit using legal terms you do not understand, a jury will likely find you less sympathetic. If you do become frustrated (you likely will), simply remind the insurer that you did everything asked of you, you paid your premiums, you submitted timely claim forms, you supported your claim and now it is time for them to live up to their side of the bargain. If you are stressed, calmly explain the importance of the benefits to you and your family and the financial stress you have endured as a result of the delay.
7. Watch it on social media!
We discuss this in detail in another blog, which you can read in full, here, but, if an insurer wants to know whether you are acting consistently with your condition of chronic fatigue, an inexpensive way for them to find out is by checking your social media. This can be problematic for two reasons: social media evidence can be easily misconstrued in the insurer’s favor and it may raise problems regarding attorney-client confidentiality. As to the former, if you say that you suffer from chronic fatigue, but then post videos to social media of you running a marathon, nobody is going to believe you. Of course, occasional running may be helpful for your condition, and you may have only been able to walk a third of a mile, but taken out of context, it will not be viewed favorably.
8. Be prepared for the long haul, including going to trial if necessary.
If an insurer denied your claim, you must be prepared for the long haul. Insurance companies are sophisticated enterprises that deal in the business of risk, and litigation suits them. They also have the resources to sustain litigation in the long-term, and depending on the circumstances of your case, this may be used to their advantage.
Accordingly, once you make the decision to sue an insurer, do so with the understanding that you may not see the wrongfully denied benefit(s) for years, (if ever).
The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long-term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak to a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (714)274-2413 for a free consultation or go to our website at www.mckennonlawgroup.com and complete our free consultation form today.