Disability insurance pays an insured person an income when that person is unable to work because of an accident or illness. While that seems simple enough, the truth of the matter is that many disability insurance carriers don’t follow the rules when it comes to providing the benefits they promised.

The rules of disability insurance

Bob Scott, a California disability insurance attorney and partner with the Advocate Law Group, sat down with us recently to discuss how the system should work. Right off the bat, Scott told us that it’s the definition of a disability that is often the greatest unknown, but many states have now imposed their own definitions. He explained:

Each state can impose a more rigorously definition of disability in individual disability policies for their own citizens as to policies issued by any disability carrier. It doesn’t matter where they’re from; if they sell policies in California, then they have to comply with California law – which is based on insurance regulations and California appellate court decisions that have interpreted the standard of disability.

California Individual disability policies

Scott told us what happens with individual disability policies in California:

In California, it must be shown that you cannot do the material and substantial duty of your position with reasonable continuity. What that means is that we have to look at just your job, not anybody else’s job. That, of course, is the only thing you’re insuring anyway because you don’t know what anybody else does, you just know what you do – and that’s the disability policy you’re buying.

So it looks at the material duties of that job, and while most of those focus on physical activities, they could also include or mostly focus on more mental capabilities as well depending on what type of occupation you have. Then we look at your job and compare that to the restrictions and limitations that your doctor has put on you.

Insurance carrier ploys

One of the ploys disability carriers do is to use a nurse to reapply the restrictions and limitations without talking to your employer as to what your job was, and most importantly, without talking to your doctor, according to Scott. He explained:

They think they can get a nurse or a doctor who has no idea of the rules, in our case the California rules of disability, and have them say, ‘Well, the restrictions your doctor put you on are not reasonable.’ There is no language or policy allowance for them to do that. So, first we have to be careful of who’s determining what restrictions and limitations are to be applied to the formula. Second, we’ve got to go through what your job duties really are – and those will come from your doctor. Third, you need to determine whether you can do it with reasonable continuity – day after day, five days and 40 hours per week.

Scott says that if you can’t meet all of those criteria, then that becomes the definition of disability to be applied for your occupation in California.

If your disability insurance company has denied your valid benefits, contact an attorney whose practice focuses in disability law to discuss your situation. To speak with a qualified disability insurance attorney, please click here. Consultations are free, without obligation and are strictly confidential.