If you have had your insurance benefits claim — disability, health, property, etc. — denied or otherwise subject to an adverse determination, then you are entitled by law to challenge the insurer’s determination. Generally speaking, your plan will determine many of the protections and limitations relevant to your benefits claim (and any subsequent challenge).
Policies that are ERISA-governed, for example, require that the claimant first exhaust their administrative remedies — by going through an internal appeals process — before bringing a civil action against the insurer for benefits and other damages.
In situations where the policy is not ERISA-governed, by contrast, claimants are not bound to go through the internal appeals process. They may choose whether to bring a civil action against the insurer, and in fact, many claimants choose to do just that instead of dealing with the additional hassle of the internal appeals process. Pursuing a lawsuit puts immediate pressure on the insurer to reconsider their earlier decision and payout the benefits that you’re owed.
Consider the following.
Review Not Conducted by a Neutral Third-Party
In many cases, those policyholders who have had their benefits claim denied (or otherwise been subject to adverse determination) choose to go through the internal appeals process with the intention of minimizing the time, cost, and complication they associated with litigation. The policyholder may also not be comfortable with approaching an attorney for assistance until they have navigated the internal appeals process first.
In truth, however, the internal appeals process can be something of a “dead end” for many policyholders looking to challenge the adverse determination of their insurer. Consider that the individuals who will be reviewing your claim submission — and evaluating whether to change the earlier decision — are not neutral third-parties. Instead, they are employees or agents of the insurer, and are therefore incentivized to interpret the facts in a way that is favorable to the insurer.
Insurance disputes often arise in circumstances where the claimant is particularly vulnerable, and as such, the need for benefits may be time-sensitive. For example, if you have suffered a disabling injury, and your insurer has wrongfully denied your disability benefits claim, then you may be left with substantial costs (and no income) for an extended period of time.
Given the time-sensitive nature of your losses (and your need to recover for such losses), any wasted time and effort on an internal appeals process is not worthwhile. Unless you have consulted with an attorney and have come to the conclusion that the internal appeals process is likely to lead to a reversal of the earlier adverse determination, then it’s best to simply move forward with litigation and attempt to negotiate a settlement in a timely manner (or secure compensation at trial).
Likelihood of a Reversal is Slim
Generally speaking, the internal appeals process is unlikely to lead to a reversal of the earlier decision to deny (or undervalue, mischaracterize, etc.) your benefits claim unless the justification for the insurer’s adverse determination was informational in nature.
For example, if the insurer denied your claim because you did not provide a complete medical record of your disability, then you may obtain a favorable result going through the internal appeals process (and simply introducing the complete evidentiary record). On the other hand, if your insurer denied your claim because they believe that your disability does not qualify for benefits due to the application of a coverage exclusion, then an insurance appeals process is unlikely to lead to a reversal.
Internal Review is Largely Unnecessary
Many policyholders do not realize that internal review is unnecessary. It is completely voluntary (so long as your plan is not governed by ERISA). Rather than going through the specific procedures and processes necessary for the internal review, it may be a better use of your time to simply prepare for civil litigation — gather documentary evidence, obtain supportive statements, seek experts to provide beneficial testimony, and more.
Connect With a Miami Insurance Law Firm for Further Assistance
Ver Ploeg & Lumpkin, P.A. is a Miami-based insurance litigation firm representing insurance policyholders in disputes against their insurers, in a range of scenarios — from ERISA-related challenges to bad-faith lawsuits.
Our attorneys have extensive experience advocating on behalf of policyholders in difficult situations involving hostile insurance companies. We have helped guide numerous claimants through the internal appeals process as well as through civil litigation, and have had substantial success negotiating settlements and buyouts (and obtaining favorable verdicts at trial).
Ready to speak to an attorney?
Call (305) 577-3996 to schedule an appointment with an attorney at our reputable Miami insurance law firm today. We look forward to helping you with your dispute.Share