Sunday, March 11, 2012

What Do to When Your Insurance Company Denies Your Claim


A determination by your insurance company that you are not covered is not the final word, but only the beginning of a process for you to obtain the insurance coverage which you purchased. Upon further investigation, facts may come to light which may cause the insurance company to re-evaluate its position and provide coverage.

Also, if suit is necessary, the courts may find that you are covered by your insurance policy when your insurer says you are not covered.

The realities of insurance

Whether you are a business that purchased a commercial general liability insurance policy or an individual who purchases a homeowner's policy or a life insurance policy, "peace of mind" was probably a big selling point made by the selling insurance agent. In return for payment of money to the insurance company today, the insurance provider promises that it will be there for you in the future should you suffer a loss.

Unfortunately, many find that after having consistently paid their premiums, an insurance provider denies their claim when they call upon their insurance company for the coverage promised in the insurance policy. In many cases, the one who determines and advises you that your insurance policy does not provide coverage is not an attorney, but a claims adjuster without knowledge of Louisiana insurance law.

Should your insurance company deny you coverage, you should seek the advice of an attorney familiar with the interpretation of insurance policy language.

When doing so, you are obtaining the opinion of a person trained in insurance law and not employed by the insurance company. If your attorney's opinion is that you are entitled to coverage, the denial of your claim is the beginning of your claim's process, not the end.

Why insurers and the insured always seem to be at odds

As an insurance company is a business, and a goal of a business is to make a profit, it is understandable that an insurance company has a bias towards denying insurance coverage. However, this bias may not be the only reason for an insurance company denying coverage to its insured.

At the time that you prepare and submit your claim to your insurance company, you may not know all of the facts and the insurance adjuster may not know all of the facts particular to your situation. In this situation, an attorney can review the insurance provisions, discover the relevant facts that trigger coverage and transmit these facts to the insurance adjuster for a re-determination of coverage.

When problems with claims persist

If the adjuster continues to deny coverage in the face of the newly presented facts, your attorney will be able to further pursue and protect your interests by filing suit against the insurance company. In this suit, your attorney will ask the court to declare that you have coverage under your policy.

In some situations it is not the lack of knowledge of certain facts which cause the insurance adjuster to deny coverage, but the policy language as the policy language relevant to your claim may have acquired a legal meaning which is not apparent to the layman or the insurance adjuster upon reading of the policy. Again, your attorney will be able to explain to the insurance adjuster the legal meaning and ramifications of the policy language and how that meaning entitles you to coverage.

Should the adjuster continue to deny coverage in the face of such law, your attorney will be able to further pursue your interest by filing suit against the insurance company asking the court to determine that you are covered by your policy.

The above situations may be best explained by real life examples:

Family #1 - Accidental Death Claim

In a claim for accidental life insurance policy proceeds, an insurance company denied the claims of a parent for the death of their child, when that child died after losing control of a car he was driving. Scientific examination of blood samples showed trace amounts of a prescriptive medicine, a medicine which was not prescribed to the child.

The insurance company denied the claim upon the basis that the child was under the influence of a controlled substance, and coverage for such was excluded by the policy. The parents hired an attorney who reviewed the policy, reviewed the chemical analysis and obtained information from a forensic pathologist about the chemical analysis. The attorney's efforts proved that the amount of the controlled substance that appeared in the chemical analysis was the minimum amount which could be registered by the test, and that a test reading of this amount could mean that there was none of the controlled substance in the child's bloodstream.

End result -

Upon being presented with this information, the insurance company reversed its position, provided coverage, and paid the full amount of the accidental life insurance proceeds to the parents. This is an example where facts relevant to coverage where not apparent to the policy holder and the adjuster. An experienced attorney was required to discover the relevant facts and present them to the insurance company.

Family #2 - Life Insurance Disputes

In another situation, an insured was delivered an insurance policy while in the hospital. The insured was diagnosed with a terminal illness during this hospital stay and died soon after. The insurance company denied coverage claiming that the insured knew of the presence of this disease prior to delivery of the life insurance policy. The insured's surviving spouse obtained the services of an attorney and suit was filed.

End result-

This attorney conducted a thorough and exhaustive research of the deceased's medical records. This attorney discovered that the only evidence of the deceased having knowledge of a terminal illness occurred within one day after the life insurance policy was delivered. The attorney presented this information to the insurance company and the insurance company settled the law suit by paying benefits to the surviving spouse.

Business Scenario - Lawsuit protection

In another situation, a commercial business was sued for libel and slander. That commercial business had purchased a comprehensive general liability policy which provided coverage for attorney's fees and court costs in defending this claim. The insurer refused to provide coverage.

The business hired an attorney to defend the business in the libel and slander suit. That same attorney then sued the insurance company for reimbursement of the insured's attorney's fees and court costs incurred in defense of the libel and slander suit.

End result-

The result of this suit was that the court found that the insurance policy sold to the business provided coverage for a cost of defense and that the insurance company owed reimbursement to the business for the attorney's fees and costs it incurred in defending the suit. Interestingly, the insurance company owed this "cost of defense" whether the business won or lost the libel and slander suit filed against it.

There are many more examples in the law books where an insurance company denied insurance coverage to its insured, only to later be found by the courts to have provided coverage to its insured. Each case is different, and each case must be carefully examined.




Just because your insurance company tells you that you are not covered does not mean that is the final verdict. When this occurs, you should seek the services of an experienced insurance attorney who is well versed in insurance law to examine your policy and the facts of your particular case as you may end up having coverage when all is said and done. The New Orleans law firm of Greenberg and LaPeyronnie can help in such cases.




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