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Accidental Death Claim Denials: When Insurers Lie

By Scott B. Elkind, Esq.

There is one commonality of all insurers when it comes to the denial of accidental death claims: They will lie. The lies come in differing forms, but nonetheless are lies. What makes this conduct worse is that this behavior is common in the industry and comes at a time when a family is earnestly seeking benefits for the lost of a loved one due to unexpected and sudden circumstances.

You would think nothing could be simpler than explaining what an accident is until you try to explain that to an insurer. An accidental death policy which will set forth a definition of “accidental death” that encompasses several pages and lists may exemptions from coverage. No one can complicate a simple concept like an insurer who does not want to pay claims.

Why do insurers do this? They have little to lose. So, why not test the waters? If the family is bereaved and does not want to relive the trauma time and again during the fight with the insurer and give up the claim, then the insurer wins. It gets to keeps its money just by saying “no.” This happens more often than people care to admit as no one wants to acknowledge weakness or wished to discuss such personal business with friends who may give them the advice that there are attorneys who fight these cases every day. Instead, they will fall prey to their emotions and forget that they need to take of business in the same fashion as the insurer. For this reason, I always advise: “Better to get pissed off than pissed on.”

The insurer is making a decision based on their economic facts rather than the facts of the claim. The insurer has provided this coverage for a very small premium since their actuaries know that few persons die from accidental causes, especially in this day of sophisticated medical care. Therefore, they are not making the profit they are seeking without denying many of the claims. Do not underestimate the amount of money involved as U.S. insurers hold accidental death polices valued at nearly $7.7 trillion dollars which earns them $25 million in annual revenue. So, the stakes involved are huge when it comes to insurance company profitability. Due to dishonest conduct in accidental death claims, several insurers have been taken to task by attorney general offices in several states and fined millions of dollars. Unfortunately, most state insurance commissioners will not take any action concerning insurer conduct of this type.

This situation is made worse when the policy is governed under ERISA (Employee Retirement and Security Act of 1974) as part of a group policy issued by an employer. ERISA does not permit jury trials, compensatory, or punitive damages. Thus, the insurer only has the policy amount to lose. So, why not take the risk and make the victim’s family fight for it. Even if the victim’s family appeals (which is encouraged by the insurer), the case will be denied forever as most people will not get the experienced counsel required to submit a winning appeal. Rather, they will request an appeal and offer very little support for payment. Afterwards, no new evidence will be allowed, the claim file closed, and the case lost even before a lawsuit can be filed.

The insurer also knows that there are not many attorneys skilled in ERISA who will take such cases and to pay those individuals who get skilled representation hardly offsets the enormous savings from the other cases left unpaid. Again, the insurer wins.

The insurers will base their denials by trying to use an exclusions in the accidental death policy. One of their favorites is the self-inflicted death exclusion for persons involved in automobile accidents. If the insurer can find any evidence of negligent or intoxicated driving, they will try to pin this exclusion on the case and deny coverage. The problem is that in many cases it is a complete fabrication and is not supported in fact or law. In one case I handled, the individual who had too much to drink was on the way to meet a new girlfriend and attend an anniversary party for two old friends. His intention was to take a couple drinks, not to have his vehicle strike a utility pole resulting in his death. The evidence I provided included the actual card he was to give the couple for their anniversary which they had kept as a memorial object due to the man’s untimely and wholly accidental death. Needless to say, the insurer paid the claim.

Another exception is the delay in death exclusion in which a person must die within a year of the accident. An example of this is a case I handled for an individual who had undergone gastric bypass surgery which resulted in malpractice when the banding was made too tight and caused the victim to slowly starve to death over a year and half as her physician watch and did nothing to help. The court ruled that each visit after the initiating event constituted acts of malpractice in themselves and allowed her to recover the insurance proceeds wrongfully denied by the insurer. Following this decision, the particular insurer involved changed its policy to include acts by a physician to be excepted from coverage. As Mark Twain so perfectly stated: “No good deed goes unpunished.”

A really infuriating exemption is that for death resulting from medical treatment. Nearly everyone has a medical problem of a small nature which requires treatment. Insurers will twist the facts any which way to try to justify the denial of benefits based on some medical treatment received by the accidental death victim. The denial letter will look very official and state that their physician reviewed the claim and found it not to be qualified to be paid.

What you don’t know is that the insurer hires the same physician time and again to write these denials. This is why such compliant doctors are called “whores” who engage in this practice. Moreover, the insurer will never attempt to contact the victim’s treating physician(s) as that would only result in a unmasking of the fraud they wish to perpetrate. So, don’t fall for this ruse.

Even if the death certificate lists the cause of death as accidental, the insurer will go out of its way to contest it and try to exempt the claim from coverage no matter how twisted or convoluted their ridiculous explanation may be. Again, you do not have to accept this reprehensible treatment from the “insurance racket.” Call and get experienced representation to assist in preparing your appeal and get the policy benefits to which you are entitled. Your grief should be restricted to the tragic lost of your loved one only.

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