Previously we blogged about Bad Faith Claims, which are claims that arise when an insurance company has grossly mishandled the claim of its insured, the policy holder/policy member.
In this blog post, we will take a closer look at what duties the insurer has/is supposed to follow and look at what duties an insured person has as well.
Duty to Assess the Evidence in a Balanced and Reasonable Manner: The insurer should assess the merits of the claim in a balanced and reasonable manner. The insurer cannot dismiss credible, alternative evidence that does not support its pre-conceived ideas.
Duty to Reasonably Interpret the Policy: Policy language must be reviewed and checked, the policy should actually be read.
Duty to Adequately Investigate: A timely and thorough investigation of the claim should be made before a claim is denied, this is essential where a claim for disability is being made under a long-term disability policy. Medical investigations are to be made and all reports are to be considered, from the insured person’s doctors as well.
Duty to Inform: The insurer has to inform the insured person of the nature and extent of the benefits that are payable to him/her, and assist the insured in the completion of the necessary documentation (provide instructions). When an insurer decides to deny a claim, there is a duty to properly inform that the denial has been made, the insured person should not be told or misled by stating “the matter is under investigation”.
In a lot of cases, we do see that insurance companies write to our clients and postpone the actual denial of benefits by saying that a final decision has not been made, the matter is under investigation pending further documentation etc. This is incredibly frustrating to our clients!
Duty not to misinform: For example, not providing a copy of the actual policy.
Duty not to Take Advantage of an Insured’s Economic Vulnerability: E.g. Submission- by trying to get the insured person to settle at an early stage in the claim, for a lesser amount than the claim is worth.
Duties of the Insured:
The insured person, as this is a contractual relationship has duties as well, to act in “Good Faith”.
Duty to be Honest: For example, in any type of disability policy, to disclose all relevant health information, all employment details, all previous claims, details of WSIB claims, anything that may be relevant. You do not want the insurance company to find out information about you any way except from you yourself.
Duty to Rehabilitate and Mitigate: You have the duty to attend rehabilitation (physiotherapy, massage etc), whatever type of therapy that helps you try to feel better. You must actively be under the care of a physician and actively be trying to get better. Mitigation refers to the attempt to return to work. You must try to return to work, and advise the insurance company of your attempts, even if unsuccessful.
Duty to Give Notice of a Claim in a Timely Manner: If you are seriously injured and believe you qualify for LTD benefits, you should not wait too long to apply. Most policies allow you to apply after a 6 month waiting period. Sometimes people apply after 2 years and their claim is accepted. But reasonable notice of a claim should be given if you want your application to be considered and not denied from the outset.
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