Common Questions and Concerns – FAQ
Answers to the questions policyholders ask most about denied claims and insurance bad faith.
Frequently Asked Questions
At our firm, we know that many policyholders are unsure if they even have legal backing to fight against an insurance company. It is important to look at frequently asked questions when considering whether or not you should pursue litigation. The following are a few of the most common questions we approach when dealing with insurance cases.
Have You Been Denied Insurance Coverage?
If you have filed a claim, but received notification that your provider will not cover your request, it is important to look closer at the situation. First of all, you must check back with your contract and ensure that the service you are requesting was a part of the original agreement. If it was not then the insurance company must not be expected to pay the claim. In cases where it was a part of your contract, then it is necessary that you appeal the claim. Should your insurer deny your coverage again, it is critical that you pursue legal action. They are committing an illegal action and breaching your contract with them. Under the Unfair Practice Act, it is against the law for them to withhold any form of payment due to you. It is highly recommended that you obtain an attorney in order to help you with the litigation process and ensure your rights are protected.
Have You Invested Time and Money in an Insurance Policy?
As a loyal policyholder, you have given your hard earned money to your insurance company for years. Paying your premiums on time so that you do not get penalized, you expect that you should have no problem filing a claim. If you have jumped through all their hoops and paid everything they have asked of you, you are entitled to fair and just treatment. According to national laws intended to protect insured individuals, it is their legal obligation to pay claims as they come in. After all that you have invested in your policy, don't you think you deserve them to follow through on their end of the bargain? An attorney in the Los Angeles area can help you pursue legal action if your time has been taken advantage of or your money wasted.
How Do Insurance Disputes Work?
When an insurance dispute can’t be resolved through the insurance company’s internal grievance or appeals process, it might become necessary to file a lawsuit. You may be wondering how much it costs to file a lawsuit and whether you can afford it. Below is a look at the steps involved in litigating an insurance dispute and the related costs. You needn’t worry about these costs, though, because they will be handled by your law firm who takes your case on a contingency basis. You won’t pay any expenses out of pocket to litigate your case. Court costs and attorney’s fees can often be recovered from the other party or deducted from the amount your lawyer recovers for you. If you ultimately win nothing at trial, then you will likely owe either nothing or only a small amount for operational costs.
What Damages Can Be Recovered In A Bad Faith Case?
You can recover three types of damages in a bad faith case. These are the contract damages, the extracontractual damages, and punitive damages.
The contact damages are damages representing the amount of the claim that was denied plus interest. For instance, if you had a health insurance claim for $50,000 that was denied, the contract claim is that amount plus interest at 10% a year.
What Is The Insurance Company's Duty?
Among the general rules governing insurance and the business of insurance in California, you'll find a long list of more than two dozen unfair or deceptive acts and practices that violate an insurance company's duty toward its policyholders. In addition, every insurance contract imposes a duty on the insurance company to act in good faith and deal fairly with its insured. Bad faith insurance practices violate the insurer's duty to its customers.
What Laws Govern Life Insurance Disputes?
Most life insurance policies – and most life insurance disputes – are governed by a federal law called ERISA. If ERISA applies to your life insurance policy, then you’ll need to follow specific timelines and procedures to pursue a wrongful denial of your claim or other dispute. In non-ERISA plans, state law will govern the procedures for resolving a conflict regarding your life insurance policy.
What Should You Do if Your Insurer Terminates Your Life Insurance Coverage?
If you miss premium payments on your life insurance policy, you typically have a certain number of days to pay back owed premiums without the policy lapsing. Even if your policy has been terminated due to missed premiums, you can typically seek to reinstate your policy. If it has only been a few days since your policy has lapsed, you can likely reinstate the policy without much hassle. If it has been several months or years, you might be able to reinstate your policy, but you will likely have to go through a reinstatement process with a new application.
What to Do if My Health Insurance Claim is Denied or the Insurance Company is Acting in Bad Faith?
If you have a valid claim that has been denied, or if you have been the target of bad faith conduct by your insurance company, you need to take appropriate steps to either have your claim resolved or build a case for an eventual lawsuit. Review the denial letter and your policy, gather all relevant evidence, file appeals, and then consider filing a lawsuit if the matter is unresolved. At all stages, it is highly recommended to have a skilled California insurance lawyer on your side.
Has Your Insurance Company Been Deceptive?
When going to collect a claim from your insurer, are they claiming that you never filled out paperwork? Or perhaps they are stating that your policy has expired or previously been cancelled. These are all reasons they hand out to policyholders to make them seem that it is their fault that they cannot receive coverage. In fact, it is merely a deceptive scheme on the part of the insurance provider. They are experts at providing excuses for why your claim cannot be paid. In reality, these insurers just do not want to pay out what they owe since it causes them to lose profits. They are not following through on their side of the commitment. Allow a legal representative to fight for your rights and get you the results you want.
Have You Been Treated Unfairly by Your Insurance Company?
Unjust behavior from your insurance provider is more than just unethical; it can hinder you both financially and in general regards to your well-being. There are a myriad of items that can qualify as unfair treatment such as breaking their promises to you, failure to disclose important information about your policy, not investigating your claims, discarding your paperwork, and other actions of disrespect. These are considered illegal and can be fought in a court of law. Seek out an insurance lawyer today to find out more about how they can help you.
What Types Of Insurance Disputes Does Gianelli & Morris Handle?
Gianelli & Morris is a California insurance law firm that concentrates on representing policyholders who are not receiving the benefit of their policy due to misconduct or mistreatment by the insurer. We handle disputes involving the denial of coverage or claims, nonpayment or underpayment of benefits, wrongful policy cancellations, and other examples of insurance bad faith. Our practice includes representing insureds in the fields of health insurance, life insurance, long-term care insurance, long-term disability insurance, and property insurance.
What Does The Term "Bad Faith" Mean?
Bad faith means an insurer acted unreasonably in denying a claim, such as denying coverage without performing a full and proper investigation or denying a claim for an improper motive. While it may seem impossible to determine the motive of an insurance company, bad faith can be proven by demonstrating that the insurance company's actions are unreasonable and lack any justifiable basis.
When is My Insurance Company Allowed to Deny a Claim?
Insurance companies may deny a claim when there is a policy exclusion or policy-based justification for denial, when the claim is insufficiently supported, when the policy has lapsed, or when there is reason to invalidate the policy itself, such as when the insured party included misleading information on their initial application.
Which Types of Insurance Policies Are Affected by Denial or Underpayment of a Claim?
Bad faith insurance practices, including unfair denials or underpayment of claims, are not limited to any one type of insurance policy. The types of policies most often affected by unreasonable claim denials or underpayment are health insurance, life insurance, disability insurance (including both long-term disability and short-term disability), long-term care insurance, property insurance, and annuities.
Why Do Insurers Deny or Underpay Claims? Why do Insurance Companies Commit “Bad Faith”?
Insurance companies are in business to make a profit, which means they want to take in as much in premiums as they can and pay out as little in claims as they can. Nevertheless, insurance carriers are bound by the terms of their contract with the insured to pay covered claims and provide other promised benefits. When insurance companies make unreasonable decisions regarding claims or decisions that are motivated by their desire to make a profit instead of a desire to meet their contractual obligations, the insurer may be said to be acting in bad faith. Engaging in bad faith insurance practices opens up the insurance company to significant liability. In a breach of contract claim, you can recover for the benefits due to you under the contract, along with any actual damages you suffered. In the case of an insurance claim denial, contract damages could include having the insurance company cover your treatment or reimburse you for your medical costs and incidental expenses. A bad faith claim, on the other hand, is based in tort law instead of contract law. In this case, you could also recover money damages for harm such as pain and suffering, additional medical expenses you incurred from delayed treatment, emotional distress, and more.
Can I Be Denied Health Insurance for a Preexisting Condition?
Under federal law, a health insurance company cannot refuse to cover you or charge you more based on a pre-existing condition. A “pre-existing condition” is a health problem you had before the date your new coverage starts.
Historically, health insurance providers limited coverage for people with significant pre-existing conditions. If someone was unlucky enough to be diagnosed with diabetes, cancer, or a debilitating knee or back injury, health insurance companies were likely to either exclude coverage for treatments of those ailments in the plan, charge policyholders significantly more for their policies, or deny health insurance entirely.
How Do I File an Insurance Bad Faith Lawsuit?
To file a meritorious insurance bad faith lawsuit, you must demonstrate that you behaved in good faith in seeking coverage for a valid claim. Review your contract, keep copies of all documents and correspondence relating to your claim, go through the proper channels to appeal any denials, put your insurer on notice of your potential legal action, and then proceed with your bad faith claims. Filing a bad faith claim requires a lot of preparation, planning, paperwork, and detailed knowledge of insurance law; we strongly recommend retaining the services of a qualified insurance bad faith lawyer early in the process.
How Do I Know When to File a Bad Faith Claim Against an Insurance Company?
You may have a claim for bad faith when an insurance company deliberately undervalues your claim, wrongfully denies your claim, or engages in a pattern of behavior intended to limit their payout on your claim. Mere claim denial or a lengthy investigation is not, in itself, sufficient to show bad faith. Bad faith requires some affirmative, deliberate conduct by your insurer that is designed to avoid paying the benefits you are owed and which flies in the face of facts, policy language, or public policy.
How Do I Select a Bad Faith Insurance Attorney?
Hiring the right bad faith attorney requires picking a firm with a proven dedication to and expertise in insurance bad faith law, as well as the experience and resources necessary to be successful at trial. It is also important to choose a bad faith insurance law firm that takes cases on a contingency fee basis to ensure that their incentives are aligned with your own.
How Does a Claimant File for Life Insurance Benefits?
First, obtain a copy of the death certificate. You can request a copy from the County Recorder's office or the California Department of Public Health – Vital Records. Also, call your insurance agent to request a claim form or claim package and policy document. You can contact the insurance company directly if you don't have an agent. Submit the completed claim form and policy document along with a copy of the death certificate certified by the funeral director.
Insurance Underpaid My Claim
If your insurance company issues a coverage decision with which you disagree, you have the right to pursue internal appeals and external reviews. If your insurer already owes you benefits and is underpaying, you may have a claim for delayed payments or even a claim for insurance bad faith. Your insurance law attorney will help you chart the best path for recovering the full benefits you are due.
My Claim Was Simple, but My Insurance Company Still Denied It. What Happened?
Whether your insurance claim is simple or complicated, it could get denied by your insurance company for a variety of reasons. There might be a small, easily-correctable mistake made by your insurance company or by yourself when filing your claim, your insurer may assert that your claim falls under an exclusion, or they may argue that there was a problem with your initial insurance application. Even if you believe your claim is simple, your insurer might have reason to deny your claim, although that reason may or may not be valid.
What are Common Reasons for Health Insurance Disputes?
When health insurers deny claims for surgery or other treatment, the most common reasons they give are that the treatment is not medically necessary or the procedure is experimental or investigational. Your doctor may have a different opinion than the insurance company, and an experienced California insurance law attorney can help you prove your case and get coverage for your medical care, along with compensation for any harm caused by a wrongful denial of coverage.
What Are the Most Common Reasons for Life Insurance Disputes?
Life insurance disputes typically arise when the insurance company rescinds the policy because it says the applicant made material misrepresentations in the application form. Insurance companies might also deny claims when they say a premium was not paid on time. Life insurance disputes also arise when there are issues identifying the proper beneficiaries.
What Is an Incontestability Clause?
An incontestability clause in an insurance policy prevents the insurance company from contesting the policy based on errors in the application, outside of a defined contestability period. This clause keeps the insurance company from denying a claim based on some error in the application, once the policy has been in force for two years. As a consumer, you are protected from having your policy canceled or claim denied simply because you mistakenly failed to provide a complete medical history or made some other error in your application for insurance. Per California law, an incontestability clause is included in every individual life insurance policy issued in the state.
What is an Independent Medical Review?
After being denied coverage for an insurance claim based on lack of medical necessity or on grounds that the requested procedure is “experimental” or “investigational,” an insurance policyholder can request an Independent Medical Review (IMR) with the California Department of Insurance (CDI). The CDI will appoint independent medical professionals to review the medical decisions by the insurance company and issue an opinion as to whether denial was justified.
What is an Insurance Health Appeal?
If your health insurance claim is denied, you have the right to appeal that decision. You will first appeal the decision within the internal channels of the insurance company, and if your claim is still denied, you can then file for external review from the state insurance department. Depending on the circumstances, you may also be able to file a lawsuit against the insurer.
What is the Unfair Claims Settlement Practice Act?
Unfair claims practice refers to improper actions by an insurer intended to reduce the payout on a claim. The National Association of Insurance Commissioners (NAIC) promulgated a model for unfair practices acts for states to enact, called the Unfair Claims Settlement Practices Act (UCSPA). Each state, including California, has implemented some form of unfair practices act, and the specifics of the law differ within each state.
Still have questions?
If you believe you have a valid claim and would like to take action against your insurance company, get in touch with one of the legal professionals at Gianelli & Morris today. We have more than 40 years of experience providing top-quality service to our clients. Whether your case involves health insurance, life insurance, or anything in between, we have the knowledge needed to provide counsel on your options and guide you through the process of filing a claim.
Call one of our Los Angeles insurance lawyers to learn more!
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