Widower Awarded Settlement for Wrongfully Denied Life Insurance Claim in COVID-19-Related Death
While the COVID-19 pandemic impacted everyone’s life in one capacity or another, the most tragic outcome was reserved for those who lost family members to the disease. While nothing can ever replace the love and affection of a relative, many families maintain life insurance to ease the financial burden that often accompanies the death of a family member.
Our client was part of one such family, and filed a claim for life insurance benefits following the death of his wife, who had contracted COVID for a second time. Unfortunately, the damage to her lungs was too severe and she succumbed to the disease in late 2021.
Following his wife’s death, our client filed a timely claim for life insurance benefits with the carrier, one of the nation’s largest insurance companies. Unfortunately, rather than promptly paying the claim—the insurer denied the claim, rescinded the coverage, and sent a check returning the premiums to our client. Unwilling to accept the insurance company’s decision, our client did not cash the check and contacted Donahue & Horrow LLP for help fighting for his rights.
After reviewing all of the documents provided by our client, we promptly filed a lawsuit in Riverside County Superior Court. The lawsuit asserted claims of breach of contract and breach of the duty of good faith and fair dealing, as well as claims seeking punitive damages. The insurance company then exercised its right to have the matter transferred to Federal Court, more specifically the Central District of California, which covers Los Angeles County, Orange County, Riverside County, San Bernardino County, San Luis Obispo County, Santa Barbara County and Ventura County.
Once the matter was at issue, the parties agreed to conduct an early mediation to see whether they could resolve the dispute sooner rather than later, and without incurring a large amount of fees and costs—a portion of which would ultimately come out any payment made to our client.
At the mediation, Michael Horrow persuasively argued the decision to rescind the policy was improper, as our client’s late wife provided the insurance company with all of the information she could have reasonably known at the time she completed her application for life insurance benefits, including the information on which the rescission was based. He additionally argued that the insurance company failed to conduct any type of underwriting investigation upon receipt of the life insurance application, including an investigation into the medical records it asserts support its denial decision, waiving its right to rescind the policy.
Ultimately, the parties settled their dispute during the mediation, reaching a favorable settlement that allowed our client to forever put the dispute with the insurance company behind him.
If, following the death of a loved one, you believe your claim for life insurance benefits was improperly denied, call Donahue & Horrow LLP at (877) 664-5407 for a free consultation.