Don’t give up when your disability claim has been denied

When you file a long-term disability (LTD) claim you expect that you will be paid the benefits you are owed. After all, you contributed to a plan to protect you in the event that an injury or a disability leaves you unable to perform your duties at work. 

You are disabled and still recovering. Your doctor agrees you are not capable of returning to the job. Yet, your insurer has terminated your LTD benefits. 

Insurance companies would not be expected to stay in business by running a deficit so they can be tight-fisted when paying out claims. But the insurer’s bottom line means nothing to you when you are struggling to pay your bills. You are frustrated and perhaps angry because it seems your concerns are falling on deaf ears. You are not alone. Our clients have told us they have felt bullied, harassed and disbelieved by insurance representatives. It is not uncommon for people to feel the insurer was “out to get them,” looking for any reason to terminate their benefits.

When you are off work due to injury, illness or disability, your focus is on getting better so you can return to the life you once enjoyed. Of course, your financial obligations do not suddenly come to an end. This added stress can be detrimental to your recovery and a claims denial is the last thing you need.

What to expect when your claim has been denied

However, it is important to remember that you have options when the insurance company wants to cut you off from your benefits, including litigation. Here is what to expect when your LTD claim has been denied.

Depending on the terms of your policy, you could be paid 60 to 85 per cent of your total lost income while claiming long-term disability. 

On the surface, it may seem easy to understand how claims work. However, there are things to keep in mind. For example, the definition of a disability may vary between insurers and even between different plans from the same provider. There are rules you may not be aware of. Did you know, for instance, that insurers are allowed to offset certain payments such as WSIB against long-term disability benefits? This means you could be expected to apply for certain “offset” payments. If you don’t, your LTD benefits can be terminated.

There are exemptions in the policy that could affect your claim, such as a pre-existing condition. A recurrence of symptoms from a previous condition that you had prior to starting your present job could result in a claims denial. 

You also have a part to play in your LTD claim. Prior to applying for benefits you must seek medical treatment for your condition and provide proof that you cannot work. A delay in getting help could adversely affect your claim.

The insurance company will then expect you to do what you can to recover while you are being paid benefits. That means if you are expected to take part in a rehabilitation program and fail to do so, your benefits will likely be terminated.

Denials and claim terminations are common

Of course, even if you have done everything correctly, it does not always guarantee a trouble-free claim. We see denials and claim terminations every day. 

If your LTD claim has been denied or your benefits have been terminated, you can appeal to the insurance company. There is a deadline, typically 90 days, and the clock starts running from the date of your denial.

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You can also take your case to court. Again, there is a deadline. In Ontario, you have two years from the date of the first denial to commence legal action.

Whether you decide to appeal or litigate it may be prudent to seek legal advice and the lawyer you choose is important. We are trauma-informed lawyers, which differs significantly from the traditional model. We build a connection and a relationship of trust with our clients that will help them feel secure during the legal process.

Our clients represent a wide variety of occupations throughout Ontario whether they have group or individual policies.

We have experience advocating for clients suffering from a variety of medical conditions and represent a large number of those from marginalized communities or groups.

There is a difference in policies and practices

I know how insurance providers work. I spent several years acting as in-house counsel for major life and health insurance companies defending LTD claims and critical illness and life insurance claims. There is a subtle difference between insurers and understanding each one’s policies and practices could have an impact on the success of your claim.

In most cases, we are able to negotiate a settlement when claims have been wrongfully denied or terminated. However, there may be times when it is necessary to go to court. 

Litigation can be stressful, involving many steps, but an experienced lawyer can help guide you through the complexities of a court case. One concern a client may have is the timing. Unfortunately, it is difficult to predict how long an individual court case will take. 

With a strong case, court can be avoided and that starts with us gathering all the pertinent evidence, which includes requesting the insurance claims file from the insurance company, obtaining medical records and reports from treating doctors, specialists and other treatment providers. Depending on your claim, we may also send you for an independent medical assessment.

All the relevant details about your lawsuit, including the damages sought, are covered in the Statement of Claim, which is served on the insurance company and filed in court. There may be preliminary matters to be determined before the trial and these are handled by bringing motions to the court. 

Examinations for Discovery will follow and this gives lawyers from each side the opportunity to ask questions. This usually takes place in a boardroom and the testimony is taken under oath. The insurance company will ask to hear evidence from you but we will take the necessary time to prepare you for your testimony so you know what to expect. Of course, we will be there with you throughout discovery. 

Specific outcomes cannot be guaranteed

Following discovery, we review the applicable law and consider whether to proceed to trial or work toward a negotiated settlement. We share our opinion with you about the likely outcome of going to court and how much money you can reasonably expect from a trial or settlement. It is important to note we cannot guarantee a specific outcome.

Throughout the lawsuit, both sides will have opportunities to negotiate a settlement. Most cases can be solved by mediation, an informal process where an impartial third party hears both sides of the case and helps the parties reach an agreement. With mediation, we would negotiate with the insurer – following your instructions – and provide you with information and advice in an attempt to resolve the case.

If the case cannot be settled, it will proceed to court. It should be noted that very few long-term disability insurance cases make it to trial. They are either settled through negotiations or at pre-trial with the assistance and encouragement of a judge who provides an opinion of how the case would likely be resolved in court.

At trial, which generally lasts as long as three weeks, a judge will decide if the insurance company is liable. It can take two to three years from the start of the lawsuit before the final judgment is rendered but we will be right there with you. 

In the end, your future is at stake. If you have been denied long-term disability it only makes sense to get informed advice so you can make the right decision.