Under Arizona Law, Can I Force My Insurance Company to Pay All My Future Benefits To Me Upfront?
Dealing with insurance companies can be difficult, even under the best of circumstances, which is why we often get asked if an insurance company can be forced to pay out all future benefits due in one lump sum—especially if the insurance company has acted particularly egregiously. The answer is, it is possible in some instances but may require lengthy and costly litigation to secure the future benefits.
In one Arizona case, the Ninth Circuit Court of Appeals held that the insured was entitled to an award of future disability benefits as part of his compensatory damages award, as well as punitive damages. See, Greenberg v. Paul Revere Life Ins. Co., 91 Fed.Appx. 539, 541-42 (9th Cir. 2004). In this case, Greenberg sued Paul Revere for bad faith termination of his disability benefits. Greenberg also supplied evidence that his disability was likely permanent and thus that he was qualified for future benefits.
The court found in favor of Greenberg, holding that Paul Revere had so strained its relationship with Greenberg, through the constant claims and threats it made to terminate his policy benefits, that they had repudiated his insurance policy.
The Court advanced the payments due under the policy and also awarded Greenberg $2.4 million in punitive damages. The Court reasoned that allowing future policy benefits as part of the regular damages award was consistent with the fact that the jury could have reasonably concluded that the policyholder would have been entitled to receive future benefits if the policy had not been prematurely repudiated.
In its discussion, the Ninth Circuit pointed out that the Arizona Supreme Court had not addressed the issue directly, regarding paying future benefits as an award for a bad faith termination, but that Arizona law did contain a general presumption in favor of future damages.
It also pointed out that “[o]ther states have found that an award of future damages is consistent with the general tort requirements of ‘direct and proximate’ causation where there is evidence that (1) the insured will continue to be ‘entitled’ to disability benefits, and (2) the insurer will continue to deny those benefits.” The court summarized that if the Arizona Supreme Court were to address the issue, it would likely hold that future policy benefits may be awarded as compensatory damages.
