You got long-term health insurance for a reason. Whether you bought the policy on your own, or you acquired it through your employer, the idea was to have some financial protection in place should you become unable to work. Despite paying premiums, providing documentation, and answering all their questions, you still don’t have what you need, and what you were assured you would have.
If you’ve ever had the experience of an insurance company that treated you well while you were making payments, but changed significantly when you filed a claim, you’re not alone. Whether it’s auto insurance, life insurance, or long-term disability, bad faith practices are universal.
How Bad Faith Is Used
The term “bad faith” refers to any insurer’s tactics that back down on its obligation to customers when one files a claim against their policy. This can take the term of stalling, or taking a very long time to process a policyholder’s claim, or outright denying their claim. Both are intended to avoid paying legitimate claims to a policyholder who has faithfully paid premiums according to the policy’s terms.
You may not realize at first that your insurer is actively working to deny your claim. Over time, you may start to wonder what’s going on, especially when you begin looking for answers and have none.
How They Do It
Common bad faith practices by insurance companies include:
- Failing to acknowledge the receipt of a claim
- Delaying action without an explanation
- Requesting unnecessary or excess documentation, then claiming “failure to submit” as a reason to deny the claim.
- Misrepresent a policy’s language to avoid paying a claim
- Delay or failure to investigate your claim
- Fail to disclose a policy’s exclusions and limitations to a policyholder before purchase,
- Make unreasonable demands of the policyholder to prove that their loss was covered under the terms of their policy.
- Failing or refusing to explain why a claim was denied
- Withholding important claim information
- Attempting to settle a case for less than a fair amount
- Inappropriate premium increases
- Advising a policyholder not to hire an attorney
These are just some of the ways an insurance company might attempt to dissuade you from making a claim or encourage you to give up.
What Texas Law Says
Should you discover that your LTD insurer is engaging in bad faith tactics, you do have the law on your side.
All insurance policies and contracts in the state of Texas include the implied covenant of good faith. That is, the insurance company is required to treat you fairly and honestly, even if it isn’t included and written into the policy. If the insurer fails to abide by this covenant, they have committed “bad faith,” and can be sued once you’ve gathered adequate proof.
Both Chapters 541 and 542 of the Texas Insurance Code disallow insurance companies from “unfair or deceptive acts or practices in the business of insurance.” If you sue your insurer and win, you could possibly collect as much as three times the amount of your actual damages.
For help with a bad faith LTD insurer, it’s important to work with an attorney who understands disability cases and how to turn them in your favor.
Has Your LTD Insurance Company Shown You “Bad Faith?” Call Herren Law
The last thing you need when you’re applying for long-term disability is an insurance company playing games. “Bad faith” can take many forms, leading to one thing—not paying you. Don’t give up. We can help you fight back.
We’ve helped over 4,000 Houstonians have received their LTD benefits. The Herren Law Firm can help you with your application, appeals and help you through the process, and give you one less thing to worry about. Contact us today at 713-682-8194 (or use our online contact form) to schedule your free consultation. There’s no obligation and no up-front fees. We only collect if we win your case.
