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3 Critical Mistakes People Make In Their ERISA Disability Claim

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By Scott E. Davis, Disability Attorney

I have been practicing ERISA disability law for over 16 years, and after representing hundreds of clients before their insurance companies and in federal court I’ve learned that there is 3 critical mistakes that just about everyone makes. 

  1. Believing the Insurance Company Will Pay Your Claim
    • “My problems are obvious –  won’t the insurance company just pay my claim?”  Beware of assuming the insurance company wants to pay your claim and will do so if it is legitimate.  Many people do not realize that disability insurance companies labor under an inherent conflict of interest – they are the sole decision maker who is charged with providing a full and fair review under federal law but when they deny your claim they save potentially 10s -100s of thousands of dollars.  To add insult to injury, there is no penalty under federal law for a bad, wrong, or blatantly obvious decision that is tainted by this conflict of interest.  Why, ERISA (Employee Retirement Income Security Act) does not give you protection in the form of a bad faith and/or punitive damage claim.  These claims which exist in many states are not provided for under ERISA.  A bad faith and punitive damage claim keeps the insurance companies honest because if they deal with you in bad faith they could potentially pay you a multiple of the value of your claim.  These claims do not exist under ERISA and, as a result, disability companies can deny claims without any financial fear.  In fact, many people are shocked to learn that after their claim has been denied, and they may have lost many possessions, that the most the company will ever owe them, is their monthly disability benefit.  The public is not nearly as skeptical of the disability companies motives as they should be.  Which is why they are often very surprised their claim was denied.   Now that you understand that insurance companies really only care about dollars and cents, you should be skeptical and have a game plan from the beginning and not assume that your claim will simply be approved if you fill out the forms and submit them because there is no incentive for the insurance company to do so.
  2. Not Consulting An ERISA Disability Attorney Immediately After Your Claim Has Been Denied the First Time
    • Because people often make the mistake of trusting their insurance company, they do not see the obvious need to get an attorney involved when it is critical to do so.  The time to get a knowledgeable ERISA attorney involved in your case is often before you file the claim, or at the latest, after the first denial.  Under ERISA , the insurance company has to give you 1 appeal and you must take it.  All too often, people believe the initial denial was a mistake, an oversight, or human error, because they are not skeptical enough of  insurance company.  They made no mistake, the insurance company meant to deny your claim.  The mistake you make is appealing the denial on your own and chasing the frequent red herrings or excuses that the insurance company gave for denying your claim.  It’s a bit like playing pin the tail on the donkey.  In their denial the insurance company told you where the donkey is, but the problem is, you are never going to pin the tail on the donkey because the donkey will be moved by the insurance company.  The critical mistake is that you will often only have 1 appeal, and that is your opportunity to submit all of the evidence necessary to prove your claim.  It is important to understand that the claim and appeal process with your insurance company is your only time to provide persuasive medical, vocational, and lay witness evidence to prove your case.  Many people completely miss this opportunity.  It is critical to understand that once that appeal is over and the insurance company has made a final denial in your claim, you will no longer have an opportunity to submit any evidence in your claim.  Your only option will be to take your case to federal court.  As a disability attorney, nothing bothers me more than seeing honest people with legitimate disabilities who handled the appeals themselves and messed up their cases because they did not understand what they were doing.  The real problem is that your case in federal court is only going to be as good as the evidence that was submitted to the insurance company before that final denial was issued.
  3. Not Retaining an Attorney Who Specializes in ERISA Disability Law
    • ERISA is a complex, broad, federal law that governs just about every aspect of the employee benefits you receive from your employer.  Many people make the mistake of assuming that any attorney should be able to handle their case or that the cheapest attorney must be better.  You would not dream of asking your plumber to do surgery on you, and people do not often realize that attorneys focus their careers on one or two practice areas only.  Given the complexity of ERISA and the ever evolving case law issued by the federal courts, it is nearly impossible for an attorney to be truly proficient and knowledgeable in ERISA law without practicing in it full time.  Thus, a critical mistake is not hiring the right attorney who practices full time in this area and has substantial experience in winning cases.  You should ask tough questions of any attorney you contact, such as: How long have you been representing clients in ERISA disability claims?  How many clients have you represented in ERISA disability claims?  How many cases have you actually filed in and litigated in federal court?  What is your overall rate of success in getting claims paid?  The attorneys answers should give you a firm conviction that they are the right lawyer to represent you.  If you are uncomfortable with any of their responses you should keep looking.  Now that you know, the best way to avoid being another victim of your insurance company is to pay attention to these mistakes and make sure you don’t fall into this trap.  We have had over 18 years of success helping our clients defend themselves against insurance companies.  If your claim has been denied, call us at call us at(800) 588-1710, for a free consultation.

© 2015  Scott E. Davis, Disability Attorney