Disability Insurance Claim Denial: Advice and Answers
UPDATED: July 21, 2020
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The least you should know...
- Insurance companies must provide a detailed reason for denying your claim
- You have a right to appeal your denial
- Your appeal should detail specifically all the facts that refute the reasons given for the denial
- An experienced disability or insurance law attorney can make a huge difference in having a successful appeal
Why is a disability insurance claim denied?
A disability insurance claim denial can be difficult to understand. In order to address many of the questions that may arise, we're going to start with a question from a user:
I have had HEP C for several years and recently was forced to quit working in the school system when my immune system broke down. The school's disability insurance company is denying my claim. However, I was told my diagnosis would qualify me for social security, but I'm not eligible for that system, since I didn't pay into it when working. Isn't the insurance company liable to pay those claims?
There are many different issues brought up in this question, so we're going to try to break out each question and some other common questions below. If you find yourself needing assistance with an appeal, you can begin your search for an experienced insurance lawyer near you by putting your ZIP code into our search tool.
Frequently Asked Questions: Disability Insurance Claim Denials
What happens if short term disability is denied?
If you've had your claim for short term disability denied, what now, you may ask. There are a couple of reasons your claim might have been denied, and knowing why you were denied disability benefits will help determine your next steps.
If you were applying for short term disability due to an injury or accident sustained at work, you may have applied for the wrong benefits. Disabilities caused by work-related incidents usually fall under workers' compensation policies rather than short term disability insurance.
If your claim was rightfully filed under disability insurance, you have a right to a disability insurance appeal.
What can you do if you are denied long term disability?
Whether you were denied long term or short term disability, you have the right to appeal. If you've been denied disability benefits, review your denial letter to know the precise reason your claim was denied. In your appeal, be sure to address all the specific reasons. Consulting with an experienced insurance or disability attorney can help to ensure a successful appeal.
How do I write an appeal letter for long term disability denial?
Your letter contesting the denial of benefits should include
- Your policy number
- Your claim number
- The reasons given for your claim denial
- The problems you've found with each reason for claim denial
- All the evidence you can provide to refute each reason for denial
Your long term care insurance appeal letter should be carefully written to directly address and refute every reason given for the initial denial. Consulting with an attorney to make sure your letter also addresses any other reasons for denial is a good idea.
Does everyone get denied disability the first time?
No, not all claims are denied the first time. Your insurance company is required to operate in good faith, but they are also in the business of denying claims and therefore saving money when they can.
If your claim was denied wrongly, you should definitely find an insurance attorney to help you appeal the denial. When the company denies a claim inappropriately, it's an illegal bad faith disability claim denial. For example, if instead of investigating your claim they instead try to find a minor, unimportant error in your application for insurance in order to deny your coverage, this is bad faith.
(If, on the other hand, they find that you misrepresented something important or "material" on your application, rescinding your policy may be proper.)
If the reason for your denial was not in good faith, you may need to consider suing your long term disability insurance company in addition to filing an appeal. If you do need to file suit, an insurance attorney will prove indispensable in proceeding against the company.
You can use our expert reviews of insurance companies to see the best and worst long term disability insurance companies and see how your provider stacks up.
How are insurance company disability determinations related to social security disability claims?
An insurance company is NOT bound by the determination that Social Security would make, nor vice versa. Though some companies may use similar criteria, there is no relationship between the findings of eligibility for benefits.
Bad Faith and The Disability Insurance Claim
Insurance companies have an absolute duty to honor their policies and pay those claims their policies obligate them to pay. If they act in bad faith, they could be held liable for punitive damages in addition to the benefits they failed to pay.
That said, the terms, conditions, and definitions of disability in disability insurance policies vary from company to company, and from policy to policy. Your policy itself sets forth the definition and standards you must meet and the nature of the proof you must submit to establish a disability.
Merely claiming that one cannot work and thus is disabled does not do it. Merely stating one has a serious disease does not do it. You must tie the disease or condition into an inability to do the level of work defined in the policy.
This is done by submitting adequate medical evidence -- your treating physician's reports, test results, specialist opinions, etc. While people can do this on their own, and insurance companies pay most claims quickly, in some cases the disability may not be very clear. It may be the evidence of a covered condition or illness is inadequate, or the causal relationship between the illness and the disability is vague, or the tie in between the condition and inability to actually work is missing.
In such circumstances lawyers help people establish the disability, by determining what additional evidence is critical and assisting them in getting it — benefits may have been denied because the doctor's report was not properly written to demonstrate the nature and extent of the disability and the causative factors, or the onset or likely duration of the disability. Social Security disability lawyers do this all the time, and so do many insurance lawyers.
An insurance company's staff tends to pay much greater attention when lawyers get involved, as they recognize that the next step may be litigation (which nearly all insurance companies want to avoid) and in some cases, liability for bad faith by way of punitive damage claims.
You may also want to contact your state insurance department and enlist its help, but as most of them are overworked, understaffed, and underfunded, it is far less likely to get you the results than a lawyer.
Bringing it All Together
It's not uncommon for a claim for disability insurance benefits to be initially denied. If you are denied coverage, you have an absolute right to appeal. When you appeal the denial, be sure to fully refute every reason provided for the denial.
Did we answer all your questions about disability insurance claim denial? If you have more questions or are dealing with a claim denial yourself, finding an attorney to assist you may be the difference between a successful or failed appeal.
To begin your search for a social security or insurance attorney near you, put your ZIP code into our search tool below.