Bad Faith Damages May Be Recoverable in Disability Insurance Claims
If your claim for disability insurance benefits is governed by state law instead of ERISA, you may be able to make a bad faith claim in court. It is important to note, however, that bad faith damages cannot be recovered in ERISA cases. Once a short- or long-term disability appeal has been denied, you can challenge the decision by filing a complaint in court. One particular way to challenge an adverse decision is to demonstrate the insurance company acted in bad faith in denying a participant’s claim for benefits.
Courts have taken the stance that if a claim is reasonably debatable, then the insurer is allowed to debate and deny it. But with each policy of insurance they issue to individuals, insurance companies owe a duty to make a good faith effort in evaluating any claim for benefits that they receive.
To demonstrate this good faith effort, insurance companies will often review all of the relevant medical documents of the claimant and evaluate his or her claim based upon that information. However, on occasion, an insurance company will place its own interests above of this duty, denying valid claims without fully taking all of the information into consideration or providing a valid reason for the denial. These denials are seemingly in “bad faith” as they unreasonably deny a claim for benefits from individuals who are truly prevented from working by their disability or injury.
Was Your Disability Claim Denied in Bad Faith?
A bad faith denial of a claim typically occurs when an insurance company is obligated by the insurance policy to pay the claimant because of his or her injury but, instead, the insurer denies the claim without providing the claimant an adequate reason for the denial. Bad faith denials are often caused by the insurer not taking into consideration all details of the individual’s disability instead relying only on the aspects of the disability or doctor’s notes that support the decision to deny the claim.
I Believe My Claim Was Denied in Bad Faith — Now What?
When a claim is denied in bad faith by an insurance company an individual may file a claim with the court for breach of contract and for the bad faith denial of their claim. For these violations, an insurance company may have to pay more than the policy benefits including paying attorneys’ fees and other damages arising directly from the bad faith actions. For example, an individual who is unable to pay their mortgage because of the insurer’s bad faith denial of the valid claim for benefits, and is foreclosed on due to that lack of payment, may be entitled to compensation for that foreclosure.
We Research & Appeal Bad Faith Denials
Our firm represents clients at all stages of the disability insurance benefits claim process. If you have been denied disability benefits by your insurance provider in bad faith we’re ready to help.
Contact us if you would like to discuss your situation or legal rights with a Wisconsin disability attorney. Please call a Madison disability attorney directly at (608) 257-0040 or a Milwaukee disability attorney at (414) 271-8650, or email us via our Contact Page.
To learn more about our Long Term Disability practice, please see our Long Term Disability blog topics.
Bad Faith Damages May Be Recoverable in Disability Insurance Claims
If your claim for disability insurance benefits is governed by state law instead of ERISA, you may be able to make a bad faith claim in court. It is important to note, however, that bad faith damages cannot be recovered in ERISA cases. Once a short- or long-term disability appeal has been denied, you can challenge the decision by filing a complaint in court. One particular way to challenge an adverse decision is to demonstrate the insurance company acted in bad faith in denying a participant’s claim for benefits.
Courts have taken the stance that if a claim is reasonably debatable, then the insurer is allowed to debate and deny it. But with each policy of insurance they issue to individuals, insurance companies owe a duty to make a good faith effort in evaluating any claim for benefits that they receive.
To demonstrate this good faith effort, insurance companies will often review all of the relevant medical documents of the claimant and evaluate his or her claim based upon that information. However, on occasion, an insurance company will place its own interests above of this duty, denying valid claims without fully taking all of the information into consideration or providing a valid reason for the denial. These denials are seemingly in “bad faith” as they unreasonably deny a claim for benefits from individuals who are truly prevented from working by their disability or injury.
Was Your Disability Claim Denied in Bad Faith?
A bad faith denial of a claim typically occurs when an insurance company is obligated by the insurance policy to pay the claimant because of his or her injury but, instead, the insurer denies the claim without providing the claimant an adequate reason for the denial. Bad faith denials are often caused by the insurer not taking into consideration all details of the individual’s disability instead relying only on the aspects of the disability or doctor’s notes that support the decision to deny the claim.
I Believe My Claim Was Denied in Bad Faith — Now What?
When a claim is denied in bad faith by an insurance company an individual may file a claim with the court for breach of contract and for the bad faith denial of their claim. For these violations, an insurance company may have to pay more than the policy benefits including paying attorneys’ fees and other damages arising directly from the bad faith actions. For example, an individual who is unable to pay their mortgage because of the insurer’s bad faith denial of the valid claim for benefits, and is foreclosed on due to that lack of payment, may be entitled to compensation for that foreclosure.
We Research & Appeal Bad Faith Denials
Our firm represents clients at all stages of the disability insurance benefits claim process. If you have been denied disability benefits by your insurance provider in bad faith we’re ready to help.
Contact us if you would like to discuss your situation or legal rights with a Wisconsin disability attorney. Please call a Madison disability attorney directly at (608) 257-0040 or a Milwaukee disability attorney at (414) 271-8650, or email us via our Contact Page.
To learn more about our Long Term Disability practice, please see our Long Term Disability blog topics.
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