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Tricks Insurance Companies Use To Deny Disability Insurance Benefits

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Your Policy may have an illegal definition of total disability.

Your policy definition of total disability may be illegal and misleading. Reading your total disability definition in your policy may make you believe you are not disabled under your policy, when you legally are disabled and entitled to benefits. Many insureds who read their disability insurance policies are deceived into thinking they are not totally disabled under California law. 
"Total disability" is defined under California law, and replaces the deceptive policy definition by operation of law.
California law defines “total disability” as “a disability that renders one unable to perform with reasonable continuity the substantial and material acts necessary to pursue his or her usual occupation in the usual and customary way.” Moore v. American United Life Ins. Co. (1984) 150 Cal. App. 3d 610, 632.

Insurance Carriers not protecting insureds’ interests equally

In Mariscal v. Old Republic Life Ins. Co.(1996) 42 Cal.4th 1617, 1623 (1996), the court stated that an insurer “has a duty to protect the insured's interests as if it were its own . . .” Mariscal, 42 Cal.4th at 1623 (emphasis added). When investigating a claim, the insurance company must diligently search for evidence which supports its insured’s claim. 42 Cal. 4th at 1623. An insurer who ignores evidence available to it which supports a claim is liable for breach of contract and breach of the implied covenant of good faith and fair dealing. Id. at 1623. Has your insurance carrier been protecting your interests as if your interests were its own?

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Insurance Medical Exam

The insurance industry uses many “friendly” doctors to examine insureds. These doctors realize who is paying their bills and refers them business. Your insurance carrier may have you examined by one of these doctors, and use their report against you. The insurance company will then claim that they have a genuine dispute in denying your benefits. In California, a genuine dispute may allow your insurance carrier to avoid liability to you for their insurance bad faith.

Employees under your insurance policy can jeopardize your benefits

If you have any employees who are part of an employer’s disability insurance coverage, your insured rights may be substantially limited by Federal ERISA law. If you lose your home because your benefits are unpaid, you may have no remedy for the loss of your home. You may lose your right to a jury trial. Instead of the usual question to be answered in a disability insurance jury trial: are you disabled and thus entitled to benefits, your insurance carrier (who gets to keep its money if it does not pay you), is allowed to avoid paying your benefits unless you can prove the insurance company “abused its discretion” in denying your benefits. Typically, you cannot call witnesses at trial. Only the claim file is examined to reveal an “abuse of discretion.”

Your insurance carrier tells you your case is preempted by ERISA

Your insurance carrier may claim that your insurance coverage and any case you might bring against them is preempted by Federal employee benefit law, ERISA. Your insurance carrier will claim your rights substantially are limited. What your insurance will not tell you is that you may be exempt from this drastic and oppressive ERISA preemption. Ask us how.

Knowing the right questions to ask your doctors, rather than relying on the often biased paperwork provided by your insurance company, can be one of your attorney's most valuable contributions.