WYLIELAW lawyers are experienced insurance attorneys who fight for the rights of individuals. When you are facing the seemingly insurmountable task of fighting for your benefits with the insurance company who has denied your rightful entitlement to the benefits, you need the help of experienced attorneys who have a proven track record of standing up to insurance companies and winning. Most often an insurance benefit dispute arises at the exact time that the individual is in desperate need of the benefit coverage (money). The insurance companies use this factor to force the individual to accept a settlement far below the full value of the policy benefit that the individual had purchased. If you file a claim with your insurance company and you do not feel you are getting the benefits you paid, contact WYLIELAW.

IS THERE ANYTHING IN PARTICULAR I SHOULD REMEMBER WHEN I AM MAKING A CLAIM OR WHEN I AM DEALING WITH MY INSURANCE COMPANY?

The best thing to remember when you are dealing with an insurance company is "put it in writing" and "ask for it in writing."

Phone calls are great for quick contacts or easy answers (like "yes, we received your claim" or "yes, your premiums are current"), but you should always remember to put it in writing. This includes not only the claim itself (generally a specific requirement under most policies), but also all contacts with the insurer, ideally with the name of the person you spoke with, the time and an understanding of what was said during the conversation. This is called creating a paper trail or documenting your conversations. By documenting the ‘story’ of your claim, you can ensure that the insurance company cannot subsequently change the ‘story’ to fit their rationale for denying your claim.

If you speak by phone with someone at the insurance company, make a written note of it and keep it in a separate file. If someone is rude to you, make a note of what s/he said, his or her name, and date the note. WRITE IT DOWN. If necessary, consider sending a letter to the insurance company after each verbal contact confirming the substance of the conversation. Fax confirmations are helpful to prove receipt by the insurance company as are letters that are sent return receipt requested.

AFTER I FILED A CLAIM, THE INSURANCE COMPANY OFFERED ME A SETTLEMENT. IT LOOKS TO ME LIKE IT'S A LOT LESS THAN THE ACTUAL DAMAGES I SUFFERED. DO I HAVE TO ACCEPT IT?

No. You have the right to recover the full value of your loss. While insurers often seek to settle claims for less than their full amount, and no bad faith can be shown if the offer is a reasonable one, when the carrier offers a settlement that is completely out of line with your actual damages, or attempts to take advantage of your difficult financial situation in order to settle your claim far below its true value, that may be found to be an act of bad faith.

WHAT DO I DO IF MY INSURER REFUSES TO PAY MY CLAIM OR IT'S REIMBURSEMENT IS TOO SMALL?

If your insurer refuse to pay your claim, or pays too little, your first step, as the insured, is to immediately review the policy or plan information as it relates to claim or benefit denials and also as it relates to appeals and grievance procedures.

Most often, there is a requirement that the insured appeal a denial of a benefit or service with a written appeal within a period as short as 15 to 60 days. In addition, there are typically multiple levels of appeal or grievance, which are mandatory and which involve subsequent short time limits. Appeal or grievance procedures, depending on the policy or plan, either require that final determinations of entitlement to benefits or services be made by required arbitration, or they allow the insured or member to file a lawsuit, but only after exhausting the appeal or grievance procedures set forth in the policy or plan. Additionally, plans provided to an individual by an employer may be subject to a Federal Law, ERISA, which contains its own sets of rules and procedures.

While legal assistance from an attorney is not necessarily required at the initial levels of an insurance dispute, it is strongly urged as soon as possible if the amount involved is large, or the insurer is denying that you are "disabled" under the terms of a total disability contract or the matter is going to arbitration or lawsuit.

Rest assured that the insurance company will have a lawyer who's paid to ensure that your claim is denied.

IF MY INSURANCE COMPANY DENIES MY CLAIM, DO I HAVE ANY RIGHTS?

Absolutely. If an insurance company fails to honor its contract and pay a valid claim, you have the right to bring a civil action for damages against that insurance company. In addition to suing for a "breach of contract", in New York you may bring a General Business Law § 349 claim seeking civil damages and attorneys fees.

HOW IS "DISABILITY" DEFINED?

Total disability insurance policies commonly use one of three definitions of "disability" with varying levels of protection for the insured.

The definition that provides the most protection is that you are unable to perform your own occupation ("own-occ" policies) - the job you were doing before the onset of the disability or illness.

The middle definition defines disability in terms of your inability to perform any occupation for which you are suited by education and experience.

The third definition, providing the least protection, defines disability as the inability to perform any occupation.

The distinctions between these definitions is critically important. For example, if a surgeon loses a hand, s/he may not be able to do surgery. If s/he has an "own occupation" policy, s/he would be able to recover, even though she was able to work as a doctor in a non-surgical field.

With the middle definition, the one-handed surgeon would only recover if s/he was no longer able to work in any medically related field.

The disability policy that contains the third definition would most likely only provide benefits if the policyholder becomes so disabled as to be totally incapacitated and unable to leave their home.

IF I MISS A DISABILITY PREMIUM PAYMENT AND GET A CANCELLATION NOTICE, IS THERE ANYTHING, I CAN DO TO BE ABLE TO KEEP THE POLICY?

State law often requires insurers to allow a "grace period" of as much as 30 days after a premium payment is due before coverage can be terminated. If payment is not made within the grace period, however, disability coverage usually will terminate retroactively to the date the premium payment was due without any further cancellation notice from the company.

If your coverage terminates or is canceled because you missed a premium payment, some insurance companies may agree to "reinstate" your coverage if you make all past due payments and you certify that you are not aware of any losses or changes in health that have occurred since policy was issued or the cancellation date. If there has been an unreported health change, any subsequent claim made after reinstatement will automatically be denied. Reinstatement is discretionary by the insurance company. The law usually does not require that policies be reinstated once they have been legally canceled.

WOULD I NEED A LAWYER TO HANDLE MY CASE?
Given the complexity of the legal issues involved and the tendency of insurance companies to vigorously defend claim denials, especially after appeal and grievance procedures, evaluation of any potential legal claim on behalf of an insured should be undertaken by an attorney experienced in insurance claims and bad faith litigation.

Cases against disability insurers and plans resulting from claim denials, including bad faith remedies, are frequently undertaken on a contingency basis whereby the attorney investigates and evaluates the case before filing a complaint, advances the costs of investigation and litigation, and is paid attorney fees only if there is a recovery. In the event of recovery, the attorney is paid a percentage of the recovery as attorney fees.

While the details of contingency fee contracts may vary from state to state, and within a state from attorney to attorney, as a general rule, the typical contingency fee is 25 to 40% of the value of benefits or services recovered and 33-1/3 to 50% of any extra contractual or tort damages, such as emotional distress and punitive damages recovered.

WHAT ARE MY LEGAL REMEDIES IF MY INSURANCE COMPANY OR PLAN REFUSES TO PAY A CLAIM FOR A BENEFIT OR SERVICE?

In a circumstance where an insurance company has denied a claim and has subsequently upheld the denial through its own internal appeal and grievance procedures, the insured whose benefits has been denied can sue on a number of legal theories, including breach of contract, breach of the implied covenant of good faith and fair dealing (bad faith) and under some circumstances infliction of emotional distress and fraud.

The two primary legal remedies available in most cases are: (1) breach of contract to recover the value of the denied benefit or service and any incidental damages; and (2) bad faith. Bad faith is the unreasonable denial of a benefit and may allow recovery for emotional distress, interest on out-of-pocket losses, damages for any attorney fee obligations incurred and, in limited circumstances involving malicious or willful misconduct, punitive and exemplary damages. These legal remedies are ones that are available under state law, not federal law. In addition, especially with regard to the tort remedies of bad faith, infliction of emotional distress and fraud, the availability of the remedy and the nature and extent of damages recoverable vary from state to state. It is important to note that this area of law is currently evolving and expanding; seemingly the courts are moving in a direction to expand the protection afforded the insured against the bad faith practices of the insurance companies.

WHAT DOES THE DUTY OF "GOOD FAITH" INVOLVE?

The duty of "good faith and fair dealing" basically means that your insurance company must:

• adjust your claim (either pay it or deny it) within a reasonably prompt time,
• must cooperate with you regarding the claim (timely respond to your letters and phone calls),
• must tell you in writing precisely why it is denying the claim specifying each contract term or provision upon which it relies,
• must attempt to find a basis to pay the claim rather than find reasons to deny it, and
• must (as the duty itself states) "play fair" with you

DO DAMAGES FOR AN INSURER'S BAD FAITH GO BEYOND WHAT I WOULD BE ENTITLED TO UNDER THE CONTRACT?

Yes. In addition to what the insurer owes you under the policy (plus interest), if the denial can be shown to have been "unreasonable," you might also recover "consequential damages" (monies you had to pay out-of-pocket because of the denial), and "extra-contractual damages" to compensate for mental and emotional distress, and, in some cases, "punitive" or "exemplary damages" designed to punish the insurer and deter it and its employees from wrongfully denying similar claims in the future.

CAN I ASSERT A "BAD FAITH" CLAIM ON EVERY TYPE OF INSURANCE CLAIM THAT I MIGHT PRESENT TO AN INSURER?

No. Claims under many group insurance policies providing employee benefits are subject to exclusive rights and remedies under Federal Law (ERISA). Unfortunately for consumers, most "bad faith" rules developed by state courts simply do not apply. The more extensive damages usually recoverable in a bad faith case are basically precluded in an ERISA case, although the insurance company or plan may have to pay your attorneys fees if you are successful in an ERISA case.

However, do not take the insurer's mere assertion that the policy is "ERISA regulated" as gospel. Many policies, which the insurer claims, are ERISA plans are outside ERISA regulation. In such cases, contrary to the position often taken by the insurance company, bad faith rules and the extra-contractual damages available may indeed apply.

Many health insurance and HMO plans, and certain other policies require that disputed claims be subject to arbitration and, as a result, a traditional lawsuit in a court seeking bad faith remedies may not be possible under such policies.

I CAN'T AFFORD TO PAY A LAWYER! HOW CAN I FIGHT THE INSURANCE COMPANY WITH ALL THEIR MONEY AND HIGH PRICED ATTORNEYS?

The good news is that you can fight the big insurers and their legal counsel. Our firm specialize in insurance and bad faith litigation.. See WYLIELAW 2nd Circuit decision against a large insurance company. We will work for the insured on a "contingency fee basis." This fee arrangement allows you to pursue your case while the attorneys receive a percentage of any ultimate recovery or settlement.

If you have a valid claim we will review your issues, and even commence a lawsuit, without you having to pay any money at all. If you believe that your claim has been unfairly denied, or that the insurance company has acted unreasonably in handling the claim, do not simply let it go. Pursue your claim, assert your rights. You can fight and win.

email: wylielaw@pobox.com
(212) 566 8000 Fax - (212) 228 4744