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Bad Faith Disability Insurance Practices: When to Contact the Commissioner

UPDATED: August 5, 2019

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When your disability insurance company has denied your valid benefits or delayed your claim for an unreasonable amount of time, it’s important to contact your state’s Insurance Commissioner so they can investigate.

What the Commissioner can do

Every state has an Insurance Commissioner whose job it is to oversee his or her state’s insurance department. But, what can the Commissioner really do? A lot, according to Bob Scott, a California attorney and partner with the Advocate Law Group. In a recent interview, he told us that the California State Insurance Commissioner’s Office, now headed by Steve Poizner, has done much to combat the sometimes unethical tactics of disability insurers – such as impose fines. He explained:

The Commissioner fined companies $8 million a couple of years ago. A couple of those cases that they used in findings were my cases. He used those and others from other plaintiff lawyers like me that specialize in this field in California. He used all those cases against them, and I will say that the one attorney standing next to the Insurance Commissioner when he announced his find to the press was me.

Filing a complaint with the Commissioner is very important because it lets the Commissioner, and the world, know how many complaints there are against a company. Those are all public record; consumers can go on any Insurance Commissioner’s site and find the number of complaints that have come in on any individual company, and that’s very important for them to look at. They ought to be looking at that before they buy the insurance, but insurance agencies of course don’t tell them that.

Can filing a claim have repercussions?

We asked Scott whether claimants need to be worried about repercussions from their insurance company if they file a complaint with the Commissioner. He emphatically told us, “Absolutely not. That would be the worst action an insurance company could take. Frankly, carriers simply apply the next step of their strategy when a complaint is filed. They’ll respond and say, ‘Oh no, we’ve done the right thing,’ even though it’s not true. So, you’re forced to get a lawyer to litigate this issue to get your insurance benefits. There’s no other choice.

“It is important for individual insureds to make sure that they understand that when they get that second letter from their insurer saying that it’s done its job that it’s just a form letter. So don’t feel as though the matter is resolved. What they’re trying to do is wear out these claimants who are already sick and disabled from going forward to taking the next step after they’re denied, which is to try to find a lawyer and have that lawyer engage with the company to get their benefits. In many cases, people walk away from a lifetime worth of benefits. Unfortunately, the insurance company wins when they shouldn’t and the people don’t get the benefits for which they’ve paid. That’s crazy!”

Do these tactics apply across the board?

We wondered whether these tactics were primarily limited to one or two insurers or to the disability insurance industry as a whole. Scott summed it up very simply by saying, “Well, let me put it this way: I have yet to find a carrier that applies the standard correctly.”

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 attorney, please click here. Consultations are free, without obligation and are strictly confidential.

Bob Scott
Contributing Author: Attorney Bob Scott Advocate Law Group

Bob is a well-known trial attorney, specializing in all aspects of insurance litigation against insurance companies on behalf of the insured. Rigorously maintaining the highest standards of professional ethics, he has obtained multi-million dollar judgments, substantial arbitration awards and out-of-court settlements on behalf of his clients. Bob's clients have ranged from individuals victimized by insurance companies to large banks and industrial companies, who recognize the value of having him as their insurance expert to help make sure they get the best possible deal from insurance companies.

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Article last updated or revieewed on August 5, 2019