INSURANCE COMPANY REFUSES TO PAY DISABILITY BENEFITS: BAD FAITH INSURANCE LOS ANGELES
When an employee gets a disability insurance policy paid by their employer, they cannot sue for bad faith in California as it is considered an ERISA benefit and the federal government preempts state law. However, if an individual pays for their own disability policy, and the insurance company refuses in bad faith to pay for the covered disability benefits, the insured can sue for the unpaid benefits and for what is called bad faith insurance. This is what happened to one of our clients. In our client's case, he had been paying for a disability policy for many years. He then had business trouble, and subsequently suffered a mental breakdown. He went to see a psychiatrist a few times who prescribed medicine. Our client stopped going to his doctor as he moved out of state, but he kept renewing the prescription, and would call his doctor on the phone occasionally when the need arose. The insured (our client) applied for the disability benefits, and the insurance company continually refused to pay the benefits. This added to the stress of the client who eventually couldn't take the stress any longer and committed suicide. The disability insurance company claimed that the insured did not conform to the terms of the policy by continuing to see his medical provider. We showed that a person is indeed continuing to see his doctor when he is in telephone contact with his doctor and continues to seek medical advice by phone. Eventually we were able to settle the case for his wife and child and get them compensation for their loss. While it did not make up for the personal loss they suffered, it did help them to pay expense and be able to keep up their standard of living for the children. If you or a loved one have been the victim of bad faith insurance you should consult with a lawyer to learn your rights. If you are located in the state of California, please call us at 1-800-ALAWPRO (1-800-252-9776).
