10 More Legal Mistakes Professionals Make When
Filing a Disability Claim (Mistake #1)
In an effort to provide professionals with more information about how the disability claims process works and identify some of the most common pitfalls for professionals filing disability claims, attorneys Ed Comitz and Derek Funk have compiled an updated list of the 10 most common mistakes we are seeing physicians, dentists, and other professionals make when they file claims under the new post-2000 generation of disability policies (which are much more complex and stringent than the policies sold to professionals in the 1980s and 1990s).
In this post, we’ll be looking at the common mistake of not being actively engaged in the process of selecting your disability insurance coverage.
Mistake # 1: Blindly Relying on an Insurance Agent
Many professionals who are considering purchasing a disability insurance policy rely on an agent to find the right policy for them, often providing the agent with a vague, general objective like finding the “best” policy (or the “best” policy within the professional’s budget). In our experience, we’ve also found that it is common for professionals to go to an agent that a colleague recommended, and merely ask that agent to set them up with the “same” policy that their colleagues (e.g. the other doctors in their practice) have. Or, if the professional already has a policy, he or she may ask the agent to find them a policy that is the “same” as their existing policy.
This is problematic because there are no standard policies, and the differences between the multiple key provisions in policies are difficult to explain—even for an agent. Therefore, asking for the “same” coverage is often a request that is impossible for the agent to achieve. Additionally, while input from an agent can be helpful, insurance companies rarely provide agents with adequate training or information about a policy beyond what is necessary to sell it. As a result, agents are often unfamiliar with many of the complex terms in a policy, and the agent may not know how certain key provisions will play out during the claims process (which is understandable, as they typically just sell the policies and do not have legal experience filing claims or litigating these matters).
By design, insurance companies have now explicitly placed distance between themselves and their agents, for liability purposes. Most disability policies and policy applications now contain express language stating that agents cannot alter the terms of the policy, and disclaimers stating that the insurance company cannot be held liable for representations made by an agent. In the past, an agent’s representations could modify the policy under a legal principle called the “reasonable expectations doctrine,” so we would advice insureds to keep notes of any conversations with their agents (as well as any marketing materials). This legal doctrine is now largely obsolete given this new policy language limiting the insurance companies’ liability at the point of sale.
Action Step: If you are considering purchasing a policy, do your own research and do not rely blindly on your agent to pick your policy for you. Do not accept coverage or pay premiums for a policy until you have thoroughly reviewed the policy.
To read the rest of the 10 most common mistakes, click here.
To learn more about some of the tactics insurers use to deny claims and other mistakes to avoid, click here.