CASE EXAMPLE

An insurance policy is a legal contract which insures policyholders and pays for any damages covered by the policy. There are various forms of insurance available including auto, liability, property, fire, health, disability, workers' compensation and life insurance. Insurance gives policyholders peace of mind by offering them a degree of protection against financial losses. However, that peace of mind can quickly turn to confusion or frustration when a claim is disputed or denied.

What Are Some Of The Reasons An Insurance Company Can Turn Down A Claim For Payment Of Medical Expenses?

• The procedure wasn’t medically necessary.
• It was a preexisting condition which was not covered.
• The treatment or condition isn’t covered under your plan.
• The insurance company has terminated your coverage due to an unpaid premium or for other reasons.
• You or your doctor failed to obtain preauthorization and it was not an emergency situation.
• The doctor or specialist was an out-of-network provider.
• The treatment you received could have been provided at a lesser level of care.

While some of these may be legitimate reasons to deny coverage, each case is different and many require a trained eye to look over the fine print of your policy to determine if your rights are being violated. You may be able to appeal the denial of your claim and get the denial overturned. A lawyer specializing in insurance disputes can help you with this process.

What Responsibilities Do I Have To My Insurance Company When Filing Claims?

Your responsibilities will be primarily governed by the provisions of your insurance policy. Generally, you may have several responsibilities in obtaining benefits from your insurance company. Policyholders must file claims by the time deadline set by the insurance policy or by law, cooperate with the company and provide all information the company requests. You also may be required to give a written statement concerning the accident or incident or to undergo a medical examination. Failing to do any of these may result in a denial of coverage. When dealing with your insurance company it is best to send and receive everything in writing and keep copies in case conflicts arise.

However, not all of the responsibility lies on the shoulders of policyholders. Insurance companies must pay or deny your claim in a reasonable period of time. If your claim is denied, the insurance company must provide, in writing, reasons for the denial. They also have a duty to provide written policies in clear language that can easily be understood by the average person. Courts are often lenient with policyholders when there is more than one way to interpret a policy. The policyholder may get the benefit of the doubt.

What Can I Do If The Insurance Company Has Erred In Denying My Coverage?

If an insurance company denies a claim with little or no basis, you may be able to appeal or file a claim based on bad faith. Time is of the essence. You should schedule a prompt consultation with an attorney so quick action can be taken. Bad faith regulations were imposed on insurance companies to make them responsible to policyholders and protect them. Policyholders may be able to claim bad faith when an insurance company:

•  fails to defend policyholders in third party (liability) claims against them where one of the claims is covered
• fails to inform policyholders of the status of a claim or the reasons why it was denied
• fails to fairly and objectively evaluate a claim
• misrepresents the scope of benefits covered
• does not pay benefits in a reasonable amount of time
• utilizes a biased peer review
• utilizes a biased physician for medical exams
• fails to pay an undisputed amount

If your insurance company does one or more of these things, you may be able to collect damages. Damages available to the policyholder depend on the type of insurance and the particular policy. You may be able to collect any expenses or foreseeable losses which you incurred as a result of the denial along with any interest. You may also be able to collect for lawyer’s fees which resulted from the denial of treatment. Occasionally punitive damages are also available.

What Alternatives To Filing A Claim In Court May Be Available To Me?

Not only can a qualified lawyer help you understand your policy, but he or she may be able to suggest alternatives to filing a claim in court. Alternatives may include arbitration, mediation or negotiation with your insurance company. Arbitration is when both sides present their version of the dispute to a neutral party. After listening to both sides and considering all information, the arbitrator decides whether to award any damages and the amount of the damages. Mediation is a process in which both sides and a mediator try to reach a reasonable conclusion to the claim without court involvement. Negotiation is an attempt by both parties to reach an agreement without any outside involvement from a mediator. It is possible that no conclusion will be reached and that parties will have to proceed with their claim in court.

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