Two Reasons Insurance Companies Deny Disability Claims That Have Nothing To Do With Your Claim

Insurance Industry Secrets: Most Disability Claims Are Initially Denied

If you have disability insurance coverage and become disabled and are no longer able to work, you might think getting your benefits is as simple as having a doctor verify your disability, filing a claim, and looking forward to receiving benefits checks in the mail. Unfortunately for those who suffer from a disability, it is rarely this simple and most initial claims are denied.

Why Was My Disability Insurance Claim Denied?

There are a number of reasons disability claims are initially denied including the nature of the claim, and whether or not the claim was properly documented and filed. These denials are often due to human mistakes or a lack of proper documentation, and insurance companies hope for these mistakes so that they can deny your claim. However, denials are not always based on claim mistakes; sometimes, insurance companies deny your claim without a valid reason.

There are two other main reasons disability insurance companies look for ways in which they can deny a claim that have nothing to do with your individual claim itself.

Disability Insurance Fraud Costs Insurance Companies Money

The insurer sees a claim in only one light: the less money they pay out in benefits, the higher their profits, so how can we deny this claim? 

Unfortunately, there are people who file fraudulent claims seeking benefits for injuries and disabilities that they do not have. Insurance companies have to review, investigate, and consider all claims — even claims that may be suspect of fraud, and this costs insurers money.

Sometimes, insurers actually do end up paying on some false claims before they detect fraud. Once fraud is detected, it takes even more time and money to pursue criminal charges and restitution against people who file false claims. Insurance companies would have you believe that the rate of fraudulent claims is so high that it casts a certain degree of initial doubt on all claims.

While fraudulent claims do cost insurance companies billions in lost revenue (a recent case involving a massive, organized social security disability insurance scam in New York is just one example) what other people do, or whether or not an insurance company has lost money on other claims should not have a bearing on whether or not your individual claim is approved. In fact, the practice of arbitrarily denying disability claims for non-valid reasons is against the law in California.

Insurers have a legal duty to take the time to investigate and process your claim in a timely manner, and render a decision based on the merits of the individual claim. They may not deny your claim without a valid reason as part of an overall effort to cut costs.

The Insurance Company Business Model Is All About Profit

Insurance company commercials often make them out to look like they are caretakers — almost like guardian angels who will be there to care for you during sickness, death, and to help cover loss of property for everything from theft to fire, flood, and earthquake damages. The reality is, however, that insurance companies are businesses and like any business, their best interest is not necessarily your best interest. The more claims an insurer pays on, the lower their profit margin.

Insurance companies do not look for ways to approve claims, they look for ways to deny claims. When a claim cannot be denied for valid reasons, insurers often create new standards and loopholes and other excuses to deny a claim, or pay you the least possible amount.

Los Angeles Insurance Bad Faith Attorneys

If you believe your disability insurance claim has been unfairly denied, you should not just sit back and accept the insurer’s decision as being final. In addition to having the right to pursue your claim benefits, you may also have a right to pursue an insurance bad faith claim against your insurer if the denial was improper.

With more than 50 years of insurance law experience, we help disability insurance policy holders in Los Angeles, San Diego, Sacramento and throughout all of California. No matter where you are located in California, we are here to help you get the benefits you deserve.

The Los Angeles are insurance bad faith attorneys at Donahue & Horrow LLP, are experienced at pursuing denied disability claims in California and they offer their services for disability claims on a contingency basis. This means that you will not have to pay our attorneys to pursue your disability claim unless they obtain compensation for you. For many of our clients, the contingency fee arrangement is a relief because of the dire financial circumstances they may already be facing.

Contact us today for a free, initial legal consultation. We will fight hard for you to hold your insurance company accountable for wrongfully denying your disability insurance claim.