In our last segments on “Paying Bills After an Injury,” we discussed workers’ compensation and workers’ compensation benefits. We continue the segment in this post by discussing disability insurance policies. Disability insurance policies are sold by private insurance companies such as Aetna and the Hartford Financial. These policies pay benefits in the event you become disabled and cannot work.
Employers sometimes pay all or part of an employee’s disability premium; however, these policies are not common among truck drivers. The policies can be expensive, but they do provide financial security by protecting you from lost income on account of trucking injuries.
There are two primary types of disability policies. One type of policy is called an “Own Occupation” policy. This type of policy insures you against becoming unable to perform “the substantial and material duties of your occupation.” This type of coverage pays a monthly benefit if you can no longer perform the specific tasks of your work (i.e., you can no longer do the work required of a truck driver). Benefits for this type of coverage are paid whether or not you are able to perform other types of work.
A second type of disability policy is a “loss of income” policy. As the name suggests, this coverage pays for loss of income. In other words, if you switch occupations due to a disability, the policy will provide benefits based on a specific formula relating to losses suffered. You will not be paid just because you can no longer work as a trucker. Your benefits will depend on the difference between what you could have earned as a trucker and what you do earn in the new occupation.
Who decides whether or not an insured trucker has become disabled?
The treating doctors are usually the best judge of whether a trucker is disabled. Unfortunately, insurance companies often ignore the opinion of the treating doctor and hire their own doctor to give an opinion. Medical opinions from “insurance doctors” are usually biased in favor of the insurance company.
What standards must an insurance company follow in evaluating a trucker’s disability claim?
The obligation of disability insurers to evaluate and pay claims depends on the applicable state law, and sometime a federal law known as the Employee Retirement Income Security Act (ERISA). It is generally true that the insurance company must:
* Conduct a fair, objective and thorough investigation before denying a claim.
* Avoid misrepresenting the terms and conditions of coverage.
* Pay valid claims promptly without engaging in unreasonable delay.
* Pay valid claims fairly without requiring the insured to hire a lawyer in order to collect benefits.
* Interpret any ambiguity in favor of the policyholder.
What are the consequences if a company violates these standards?
If the insurance company fails to follow these standards, the company may be liable for damages to insured trucker for “bad faith.” A “bad faith” claim can include payment of the policy benefits; emotional distress damages, if applicable; interest on the unpaid benefits for the period in question and consequential financial losses such as having to pay capital gains or ordinary income taxes resulting from the sale of stock or of real estate necessitated by the withholding of benefits.
The policyholder may also be entitled to recover attorneys’ fees and costs incurred in having been forced to take legal action against the insurance company. In cases where the evidence clearly established malicious, fraudulent or oppressive conduct by the insurance company, punitive damages can also be awarded.
What is ERISA preemption and how does it affect disability claims?
If you obtain your disability insurance through your trucking company, your ability to enforce your policy rights may be severely limited by ERISA. The damage available under ERISA are often much more limited. For that reason, policyholders have limited leverage to compel an insurance company to follow the standards above and do what they are supposed to do under their policy. ERISA preemption can be complicated and you should talk to an experienced attorney if you have any concerns regarding your rights under the law.
If you have been denied benefits under a disability insurance policy, contact us at 855-448-7887 (855-448-7887) or email us at [email protected] or contact us on Facebook or Twitter. We will evaluate your claim free of charge and let you know if you have a claim against the insurance company to recover benefits. Disability insurers often deny valid claims hoping that the insured will give up and go away. Don’t be misled or discouraged. Make sure you talk to an attorney about your claim.