Disability insurance claims are denied for a variety of reasons, including insurance companies acting in bad faith. Denial of disability insurance benefits can result in unpaid medical expenses, rehabilitation costs, and lost wages.
Denial of Disability Benefits
People with disabilities count on their disability insurance benefits to cover a variety of expenses. When benefits are denied or delayed, a disabled individual can end up with thousands of dollars in unpaid medical expenses, rehabilitation costs, and lost wages, especially with long-term disabilities. If a claim is denied or benefits are delayed without good reason, an insurer may be acting in bad faith. Common reasons for denial of disability benefits include:
No Objective Findings
Some disability policies require objective findings to approve benefits. A claims reviewer may require clearly defined medical evidence such as blood tests, x-rays, MRI and lab tests as hard evidence to substantiate a disability. A claim may be denied if no objective findings are produced. Most policies place exclusions on disabling conditions without medical evidence since self-reported symptoms such as general pain, headaches, dizziness, and fatigue are difficult to link to a disability.
When evaluating a claim, a claims reviewer often evaluates the ability to perform a job based on the job description within the national economy, rather than specific job functions by an individual employer. This may lead to an inaccurate job description that doesn’t qualify an individual as disabled. If a disability insurance claim is denied based on the occupational definition, an individual may have recourse under Nevada insurance laws or ERISA.
Lack of Proper Medical Care
Most insurance policies require a disabled person to be under the regular care of a physician to back up a claim with clear medical evidence. Some insurance companies attempt to deny, delay, or underpay claims based on their policy clarification of “regular care” or “physician.” Some insurers award benefits based on conditions that an individual is receiving appropriate medical treatments by approved physicians.
Pre-existing conditions are often the reason for disability claim denials. A pre-existing condition is typically defined in a policy as a medical condition that a person received treatment for prior to coverage. Policy pre-existing waiting periods can range from three months to 24 months. Some policies also have elimination periods that require a person to be disabled for a certain period of time to receive benefits. Typical elimination periods range from 30 days to six months.