Why Disability Insurance Carriers Ignore the Rules

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Aug 5, 2019

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Disability insurance carriers are known for not following the rules. In fact, many carriers are continually fined for not following those rules and for their failure to treat their policyholders in good faith and deal with them fairly. But, why does this continue to happen and is it intentional?

Intentional or Accidental?

We asked Bob Scott, a California attorney and partner with the Advocate Law Group, to tell us whether he thinks disability insurance carriers don’t follow the rules intentionally or accidentally. He chose the former:

I think it’s intentional by the top echelon of the company. Obviously, the company’s legal department knows it because they get sued over it time and time again. I think that the reason for some of it is because they often train non-skilled people. Many of these claims folks do not have college educations, do not have a background in insurance, do not have a background in medicine or in the insurance regulatory background and they just do what they’re told. And they’re told to do very limited things.

We saw a report by one of the big actuaries providing a strategy to these companies on how to avoid applying the rules, and that is – don’t let the treating doctor ever decide disability. They tell the claims person to decide disability in a vacuum and then don’t even tell the doctors the definition of disability.

Why nobody knows the definition of disability…

Although it might seem unbelievable to many, the definition of disability is not included on many disability forms. Scott explained, “Claimants can know that they’re getting the runaround on this when they look at the attending physician statement form that they’re given from the company to give to their doctor. That form, the most important form which has the doctor describe why the person is disabled, doesn’t even have the definition of a disability on it anymore.”

“That’s intentional on the part of the insurance companies because the definition was included in the past. The reason they don’t include it anymore is because they don’t want the doctor to say that the person’s disabled, so they’re not bound by that doctor’s opinion in the file.”

Scott says that disability insurance companies have thought this through very well and they’ve paid for very high-powered actuarial and legal talent to create this little maze that they then try to force the disabled people through in a way to literally untie them from their entitlement to benefits.

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.

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