When unexpected health issues arise, having proper insurance coverage provides financial relief during stressful times. Unfortunately, some individuals encounter obstacles when seeking assistance through their disability policies. This article explores situations where disability claims get denied in Canada and discusses strategies for appealing adverse decisions. Additionally, we examine notable court cases to better understand legal precedents and perspectives influencing the adjudication process.
Why Claims Get Denied?
Disability insurers have a duty to investigate and evaluate submitted applications prior to approving payment benefits. They assess whether the claimed impairments qualify as true disabilities according to defined criteria within the policy language. Common reasons for denied claims stem from:
- Failure to meet policy definitions: Policies outline specific conditions and severity levels required to trigger disability benefits. If the applicant does not fulfill these requirements, the claim gets declined.
- Pre-existing conditions: Some insurance providers exclude coverage for pre-existing illnesses or injuries known to exist before purchasing the policy. Subsequent worsening symptoms might not be considered disabilities under these circumstances.
- Insufficient medical documentation: Adequate clinical records detailing diagnoses, treatments, and symptom progression are essential to substantiate a disability claim. Absence or inconsistencies in reports could lead to denial.
- Residual functional capacity evaluation: Disability insurers often hire independent physicians to review medical information and determine if the applicant retains sufficient functionality to perform work tasks. Negative conclusions can result in denial.
- Policy exclusions and limitations: Various clauses within disability policies, such as mental health limitations or own occupation vs. any occupation distinctions, influence whether a claim receives approval.
In Canada, disability claims can be denied for various reasons. Often, the insurance company will argue that the claimant’s medical condition does not meet the policy’s definition of disability or that the claimant did not provide sufficient medical evidence to support their claim.
Medical Evidence
One common reason for denying disability claims is the insurance company’s reliance on medical evidence from their own doctors, who may have never met or examined the claimant. This approach often leads to a denial of benefits, as these doctors may not have a full understanding of the claimant’s condition.
Another reason for denying disability claims is the insurance company’s use of surveillance and social media to try and find evidence that the claimant is not truly disabled. For example, the insurance company may argue that the claimant was seen performing physical activities that are inconsistent with their claimed disability.
In some cases, the insurance company may deny the claim due to a technicality or a mistake made by the claimant or their representative. For instance, the claimant may have missed a deadline for submitting required documentation or failed to disclose a pre-existing medical condition.
Canadian court cases have highlighted these issues, with many claimants challenging the denial of their disability benefits. For example, in the case of Echelon General Insurance Company v. Her Majesty the Queen in Right of Ontario, the claimant’s long-term disability benefits were denied due to the insurer’s reliance on surveillance evidence that showed him performing activities that were allegedly inconsistent with his claimed disability. The court found that the surveillance evidence was not reliable and ordered the insurer to reinstate the claimant’s benefits.
In the case of Chiang v. Great-West Life Assurance Company, the claimant’s disability benefits were denied due to the insurer’s argument that his condition did not meet the policy’s definition of disability. The court found that the insurer’s interpretation of the policy was too narrow and ordered the insurer to pay the claimant’s benefits.
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In conclusion, disability claims can be complex and challenging to navigate, and insurance companies often deny benefits for various reasons. It is essential for claimants to seek the advice of experienced disability lawyers who can help them understand their rights and fight for their benefits.
