Disability Insurance Bad Faith Lawyer Los Angeles

Disability insurance covers loss of income or loss of the ability to earn income as a result of accident or illness.  Persons who buy disability insurance depend on it to pay their bills if they become unable to work due to a medical condition.  Unfortunately, insurers sometimes deny disability claims in bad faith.  The Kristy Law Firm helps recover disability-policy benefits when an insurer unfairly denies a claim.  Our Los Angeles disability insurance bad faith lawyers know how to deal with insurance companies.

Disability insurers frequently challenge disability claims.  They may contend that the insured’s medical condition does not prevent her from performing her job.  Or they may contend that the medical condition was present at the time of the application, and not disclosed.  They may even deny benefits on the ground that the insured is able to perform another occupation that pays far less.

At The Kristy Law Firm, we aggressively yet ethically fight for the rights of disability insurance policyholders.  We fight with true grit to hold insurers responsible when they deny disability benefits to which their policyholders are entitled.

We offer a free evaluation of your case.  We represent insurance policyholders on a contingency-fee basis, which means that our clients owe us nothing unless and until we recover money for them.  If you believe your disability insurance claim was handled unfairly, call us today for a free evaluation of your case.  Or, fill out the contact form for a free evaluation.  Thank you, we look forward to discussing your case with you.

Disability Insurance Claims

Basic Provisions of Disability Insurance

Most disability insurance policies pay a specified amount for a maximum period of time if the insured becomes “disabled,” as defined in the policy.  For example, a disability policy may state that it will pay $1,500 per month, for up to 60 months.  Some policies reduce disability benefits by amounts earned while the insured was working, even though disabled.  (See Riddell v. Unum Life Ins. Co. of America (8th Cir. 2006) 457 F.3d 861, 863.)

Most disability policies pay benefits if the insured is totally disabled from his or her own occupation for a specified time period. Thereafter, benefits continue only if the insured is totally disabled from any occupation he or she is qualified to perform.  (See Pistorius v. Prudential Ins. Co. of America (1981) 123 Cal.App.3d 541, 545.)

Many policies do not pay benefits during an “elimination period” following onset of a disability – for example, the first 90 days.  Under these policies, the insured must establish that he or she was disabled continuously during the elimination period.  There is no coverage if the insured returns to work during the elimination period.

The Meaning of “Totally Disabled”

Most disability policies pay benefits when an insured is “totally disabled” by sickness or injury from actively performing the full-time duties of his or her occupation.  (See Goomar v. Centennial Life Ins. Co. (9th Cir. 1996) 76 F.3d 1059, 1062 (applying California law).)  But some define “total disability” differently.  “Total disability” may require that the insured is unable to perform:

  • His or her usual occupation (“unable to perform any and every duty pertaining to his or her own occupation … “);
  • Any occupation for which he or she is qualified by reason of education, training and experience (e.g., “unable to engage in any and every gainful occupation for which he is reasonably fitted by education, training and experience”);
  • Any occupation whatsoever (“wholly incapacitated from performing any work whatsoever for remuneration or profit”); or
  • Some combination of these definitions.

California courts have circumscribed the limitations imposed by the term, “any occupation.”  A disability policy must pay benefits if the insured is disabled from working “in his customary occupation or in any other occupation in which he might reasonably be expected to engage in view of his station and physical and mental capacity.”  (Erreca v. Western States Life Ins. Co. (1942) 19 Cal.2d 388, 394–95 (emphasis added).)  A 1984 Court of Appeal case further refined the meaning that must be given to “any occupation”:

When coverage provisions in general disability policies require total inability to perform ‘any occupation,’ . . . total disability . . . results whenever the employee is prevented from working with reasonable continuity in his customary occupation . . . or . . . another occupation in which he could reasonably be expected to perform satisfactorily in light of his age, education, training, experience, station in life, physical and mental capacity . . . .  (A)ge, education, training and experience are simply specific ingredients of ‘physical and mental capacities.’

(Moore v. American United Life Ins. Co. (1984) 150 Cal.App.3d 610, 618 (emphasis added).)

Whether the policy requires an inability to perform one’s “own occupation” or “any occupation,” “total disability” is defined in terms of an occupation’s “substantial and material duties.”  In 1942, the California Supreme Court defined how the term, “total disability” must be interpreted:  “total disability” does not mean “an absolute state of helplessness,” but a disability that prevents the insured from performing “the substantial and material acts necessary” to carry out a business or perform an occupation “in the usual or customary way.”  (Erreca, supra, 19 Cal.2d 388, 396 (emphasis added).)  Policy benefits may not be denied merely because the insured is able to “perform sporadic tasks, or give attention to simple or inconsequential details incident to the conduct of business . . . .”  (Ibid.)

The California Supreme Court’s standard in the Erreca case is still in force today.  In fact, no disability insurer may define “total disability” more restrictively that did the Erreca decision.  (Hangarter v. Provident Life & Acc. Ins. Co.(9th Cir. 2004) 373 F.3d 998, 1006); see also Moore v. American United Life Ins. Co. (1984) 150 Cal.App. 3d 610, 620.)

Conclusion

California and federal courts have developed a large body of law in the interpretation of disability insurance policies.  The circumstances of one person’s disability and inability to perform his job may be quite distinct from another’s.  The courts have interpreted varying policy language in the context of a broad range of factual circumstances.  Consequently, how a disability claim should be treated under a particular disability policy requires careful analysis of the policy and the insured’s medical condition.  If you believe that your disability claim may have been unfairly denied, seek legal advice of our Los Angeles disability insurance bad faith attorneys immediately.