What Can I Do If My Insurer Misrepresents My Policy? Do I Have a Remedy Under Arizona Law?
Disability insurance policies are often difficult to understand, even for the most sophisticated buyers. The same policy provision may be explained differently at the time you are selecting it, at the time you receive it, and when you go to file a claim. In our experience, insurance companies are not always forthcoming when they explain your policy. Sometimes they fail to tell you about certain features of your policy, or explain ambiguities in their favor, or, in some instances, even misrepresent the terms of policy provisions.
For these reasons, many states, including Arizona, have adopted laws to protect consumers from these practices. For example, insurance companies in both Arizona and California must not misrepresent important facts or policy provisions relating to any issues of coverage.[1] If the insured can show any misrepresentation related to these issues, there may be a bad faith claim.
We often speak with doctors who misunderstand how their own occupation policies work. Sometimes this is because their insurers did not explain the policies to them correctly, and other times it is simply because they didn’t take the time to read the policy when they purchased it. Many physicians and dentists seek out an own occupation policy because it generally allows for an insured to be considered totally disabled if they can no longer work in their occupation. However, some “own occupation” policies are not “true” own occupation policies, and can even shift to an “any occupation” policy after a certain amount of time has passed.
Additionally, most insurance companies today distance themselves from agents and brokers, and seek to avoid responsibility for misrepresentations made by the agents that sell their policies. While this does not necessarily mean that there are no consequences if a policyholder is mislead about the contents of their policy, it does mean that costly and time consuming litigation can be required to sort things out. For this reason, it is always best to take the time to read and understand your policy yourself, so that you know what you are paying for.
If your policy’s terms are not what you expected, an experienced Arizona disability insurance attorney can help you assess the situation and determine what options, if any, are available.
[1] A.R.S. § 20-461(A)(1) (2018); Cal. Ins. Code § 790.03(h)(1) (2018).
