How to Fight Insurance Claim Rejections: Liability Insurance and Insurer Rights

There are endless threats that present risk to the welfare of the citizens. While the government has programs that provide basic coverage to help Canadians financially, there are also insurance policies offered by life and health insurers, nonprofit insurers, Blue Cross and other organizations. That is to say, supplementary health insurance takes over where government coverage ends.
How do you get financial aid? You can request financial aid by filing a claim to your insurance provider. Claims are easy to file as long as you follow the standard procedure. The steps will vary depending on the type of insurance. In the case of health insurance claims, you might need to settle payments first and then ask the company for reimbursements.
It is imperative that you follow the procedure to the dot and completely fill out the forms. This will facilitate faster processing. Once the application is approved, you will receive a notification detailing your proceeds and then the payment will follow.
There may be cases when your application is denied. Upon receipt of an application, the company conducts a claim investigation to determine whether the claim is sound. It applies to all types of insurance including disability. If for some reason you had your disability insurance claim denied, you can contact the company for reasons.

Reasons for Denial of Insurance Claims

There are a myriad of possible reasons for rejection of insurance claims. One of them is incomplete submission of documents or misrepresentation of facts. It is essential to only write accurate information into the forms. This can be turned into a case of fraud, which will only add to your problems. The most controversial among the reasons is non-coverage of the claim under your policy. There have been many lawsuits on this due to misunderstandings. It is very important that you discuss all sections of the policy with your insurance provider before signing the documents. This prevents any complications once you make a claim in the future.
In Rosenblood Estate v. Law Society of Upper Canada (1989), 37 C.C.L.I 142 paragraph 64 (Ont. H.C.), the Court noted:

“When a claim is presented to an insurer, the facts giving rise to the claim should be investigated. If there is no coverage then the insured should be told at once and the insurer should have nothing further to do with the claim if it wishes to maintain it’s off coverage position. If coverage is questionable the insurer should advise the insured at once and in the absence of a non-waiver agreement or of an adequate reservation of rights letter, it defends the claim at its risk.”

Laws Protecting Insurance Providers

When a claim is filed, the insurance provider will either:

  1. Conduct a claim investigation for individual policies, or
  2. Determine if the pleadings require cover for liability policies. Both steps require the cooperation of the insured. In the case of the latter, quick action may have to be taken due to the underlying litigation.
    What is important is that the company should reserve its rights during the entire investigation. If not, the company might lose its right to denial of insurance claim. In Section 11 of the Insurance Act, R.S.B.C. 1996, C. 266, an insurer is protected by the following provisions:
    > “11 (1) The obligation of an insured to comply with a requirement under a contract is excused to the extent that the insurer has given notice in writing that the insured’s compliance with the requirements is excused in whole or in part, subject to the terms specified in the notice, if any.
    > 11 (2) Neither the insurer nor the insured is deemed to have waived any term or condition of a contract by reason only of (a) any participation in a dispute resolution process of either parties (b) the delivery and completion of proof of loss or (c) investigation or adjustment of any claim under the contract.”” (Emphasis added)
    > The protection afforded by section 11 also has limitations. For instance, it does not apply to estoppel or situations in which the policy holder has relied to its loss on representations by the insurance company. Also, it is also possible for an insurance provider to waive the protection of section 11 even without the presence of a written document. This provides a valid angle of pursuit by lawyers for insurance claims.

Liability Policy Denial Law

An insurance company has three possible duties to a liability policy holder; (1) to defend, (2) to indemnify and (3) to settle a valid claim. The focus of this section is the first duty, to defend.
Liability insurance protects the policy holder from liabilities incurred from lawsuits and other similar claims. During these cases, the insurance provider has every right to act on the matter according to their best interests. If the policy is large enough to cover the costs, there should be no objections from the company.
Denial of a liability policy claim is almost similar to when you get your medical insurance claim denied. You will receive a notice of the denial, and then you can decide which action to take after. However, the main question here is why the company denied the claim. One good reason is that there is still no formal law suit. You, as the insured, can notify the company about a possible claim based on the progress of your lawsuit only if you have a written document specifying your obligation. However, if you have only received a threat to sue without proper documents proving future legal action, the claim can be denied.
If your application was denied, your benefits have been terminated or need legal advice on your long term disability claim, contact us today for your free consultation(905) 218-3668.

Insurance Providers’ Legal Advice

In first party claims, legal advice has been relied on in relation to a denial. Thus, a company’s failure to take action can be considered in court. Section 11 of the Insurance Act protect providers from allegations that may result in waiver of right or the policy. This is where the company might begin to initiate denial of a claim under a liability policy or; express or imply that they be estopped from denying cover.

What Constitutes Estoppel?

This matter is yet to be defined but cited examples include accepting premium payments, initiating settlement negotiations, making representations, or investigating the claim for the purpose that coverage will be afforded. Read Neo J. Tuytel, Waiver, Estoppel and Causes of Action (Vancouver: Continuing Legal Education, 1994) for an in-depth discussion on waiver and estoppel.

Liability Insurance Claim Denied: What to Do

Once your claim is denied by the company and you submit a complaint, the most common course of action by the company is to make a declaratory action. This is mainly to protect their interests. For instances when the issue is exclusively whether the claim is under the policy or not, the declaration should be simple. However, if the validity of the policy is questioned, complications will certainly arise. Legal aspects will be discussed such as breach of condition, policy coverage, and nondisclosure on the part of the insured, and many others.
Please refer to our helpful page on Disability Insurance Lawyers’ Long Term Claims & Obligations in order to learn more about what a disability insurance claim attorney can do for you – and how they work.
Fighting insurance claim denials takes time, energy, and financing. That’s why the team at TSF lawyers, as Disability Insurance Lawyers, are always there for you. Contact us today for more details in regards to any Long Term Claims.