Individuals and companies purchase insurance to protect them when they suffer losses from such things as property damage, liability claims made against them, disability and other harms that adversely affect them. The insurance they pay premiums for is supposed to protect them by paying for their losses, defending them from claims made against them or paying benefits according to the terms of the insurance policy. As well the insurer owes the each of its policyholders a duty to act in good faith in connection with their claim.
Cases We Handle
- Denial of coverage claims
- Limits of coverage issues
- Disability claims
- Fire/Water/Land settlement damage claims
When that insurance fails to respond to their claims or seeks to unfairly value their losses, individuals and companies require practical advice as to the claims process, their rights under the insurance policy and what steps can be taken to enforce those rights and at what cost. This is what we do.
We represent individual policy holders who are experiencing problems with respect to a claim under their homeowners, life or disability policy.
We represent business policy holders who are involved in disputes with their insurer over whether a claim is covered under their policy, whether the insurer has a duty to defend them against claim made against their business, the valuation of property losses and business interruption claims among others.
Claims Under A Homeowner’s Policies
What are Homeowner’s Policies?
Homeowners policies are typically “all risk” policies which provide a broad range of coverage for property damage to your home as well as liability coverage for claims made against you or a family member for something you were alleged to have done that caused loss and damage to someone else or their property. Property damage to your home could include fire or some other cause of physical damage. Liability coverage for example would be coverage for a claim made by someone falling down the stairs to your home which would include the insurer paying the costs of defending the claim as well as any damages payable to the injured party.
In the event that you have a claim, typically the 1st step is to contact your insurance broker or the insurance company that sold you the policy. The purpose of your contacting them is to report the claim and obtain their assistance in assigning adjuster or in some other fashion assisting you in dealing with the situation that gave rise to the claim. For example, in the case of a fire, arrangements would be made for alternate accommodation.
Depending on the nature of the claim, the insurer may retain an insurance adjuster to investigate the claim. The insurance adjuster is typically asked by the insurer to determine whether there is coverage under the policy with respect to the claim as well as advise them as to the nature and extent of the damage and the estimated repair costs in the case of property damage. While insurance adjusters typically perform their obligations professionally, they are hired by or work for the insurance company, not by you.
If in the course of the investigation of your claim by the insurer, usually by the adjuster, you are asked to sign a non-waiver agreement or served with a reservation of rights letter, this means that there may be a coverage issue under your policy in connection with your claim. In those circumstances it is wise to seek advice as to what the potential problem is and what can be done to deal with it as soon as possible. If coverage is denied, you should seek legal advice to determine whether the denial of coverage is justified or not. The limitation period, that is the period of time in which you have to bring a legal action to contest a denial of coverage, is now 2 years from the date of denial.
Problems that can arise in the course of your property damage claim relate primarily to whether the claim is covered or the valuation of the claim i.e. the extent of the damage or what options are available to you under the policy if the claim is for a total loss. If you and the insurance company disagree as to the value of the property insured, the nature and extent of repairs or replacements required or whether or not they were adequate, the recently amended Insurance Act of British Columbia contains provisions to resolve the disagreement as between you and the insurer. That process can be invoked by you or the insurance company. We can explain this process, your rights, and see you through the appraisal process to obtain the best results we can.
In regards to liability claims, that is claims made against you or members of your household, the most common problem is coverage – that is whether or not the claim is covered and whether the insurer has a duty to defend the claim. The “duty to defend” is an important part of your policy as it obligates the insurer to pay legal fees associated with your defense which can be considerable.
If your claim is denied, coverage issues are raised or you are offered far less than you think the damage to your home is worth, you should consult with one of our lawyers who can explain the claims process, evaluate your insurance coverage, advise you as to your rights and the appropriate steps to take, and answer any questions you may have.
Wrongful Denials Under Life Insurance Policies
We have life insurance policies so that if something happens to us our family members will have sufficient funds to carry on without us. In some cases, the life insurance company denies coverage and refuses to pay benefits to the designated beneficiary or there is a dispute as to the beneficiary designation under the policy which delays payment pending the resolution of the beneficiary issue.
Denials of coverage under life insurance policies usually fall into one of 2 categories. The 1st is a dispute over the cause of death including that the claim is excluded under the policy because of the cause of death. The 2nd and more common reason for a denial of coverage is that the insured misrepresented a fact at the time that they made the application for the insurance. Those of you who have completed life insurance applications know that they provide a form with a great many questions as to your previous health history and health status. As well, during the application process you may be examined or interviewed by a nurse who asks further questions and records the answers. If there is a misstatement as to prior health history, which can simply be a forgotten event or condition, the insurer may deny coverage on the basis that the deceased misrepresented his or her health history and had they been aware of the true facts they would not have sold the policy or they would have charged a higher premium.
If an insurer communicates any difficulties with coverage or beneficiary designation, legal advice should be sought as typically the monies payable under life insurance policies are considerable and the issue as to whether an insurer can rely on an alleged misrepresentation can be complex.
Wrongful Benefit Denials Under Disability Policies
Many Canadians have disability policies either purchased individually or as part of a group policy through their work. These policies typically are expensive and people purchase them because they are worried about how they are going to provide for themselves and their families if they were unable to work as a result of a health issue or non-work related injury. Regrettably, the insurers who sell these policies can unjustifiably or on a pretext refuse to pay disability benefits – some would say because reducing claim payments benefits them financially.
Denials of benefits works a hardship on people because they rely on the disability policy to pay them while they are disabled and if coverage is denied then not only can’t they work, they don’t receive any benefits under the policy they paid for creating a real financial hardship at a time when they and their families need the benefits the most.
In most policies, there benefits are payable if you are totally disabled from performing your job after an “elimination period” of 3 months. Those benefits may be payable to age 65 if you remain “totally disabled”. Those benefits are typically for a percentage, often 2/3rds of your usual take home pay.
There are 2 major categories of disability policies based on the extent of protection they offer. The 1st is commonly called an “any occupation” policy which essentially provides that after 2 years from the end of the elimination period, you are only considered to be totally disabled if you run unable to perform any occupation – not your occupation at the time that you became disabled.
The 2nd type of policy is referred to as an “own occupation” policy and will continue to pay benefits as long as you remain totally disabled to age 65 after the two-year elimination period if you are unable to do the work involved in the occupation that you had at the time that you became disabled. To illustrate the distinction between the 2 types of policies, if you were a construction worker and had an “own occupation” policy, if you are disabled and unable to return to work as a construction worker, then you would continue to receive benefits under the policy. If you had an “any occupation” policy, you would not receive benefits if you were able to do another occupation such as sales, working hardware store etc. despite the fact that you would be earning substantially less in that occupation.
In many cases a disability insurer will initially pay benefits under the disability policy. The policies typically stipulate that you continue to receive benefits you have to be under the regular treatment of a physician, following any recommended rehabilitation plans and remain totally disabled. Problems most frequently arise when the disability insurer says:
- that you have recovered when you have not,
- have failed to cooperate with rehabilitation or to seek continuing medical care and
- upon the expiry of the two-year elimination period under “any occupation” policies when in many cases the insurer will say that you are capable of returning to some occupation.
In our experience internal appeals to the insurer are usually unsuccessful however that is an option that should be considered in the context of an overall strategy in the event the internal appeal fails.
What we do when you retain us is to ask the right questions and find a solution. We obtain details as to the nature of your disability, treatment and the likelihood of recovery and other factors and evaluate coverage under the policy. We then provide advice as to the strengths and challenges of your case, what options are available and the estimated cost of proceeding with those options.
There are number of issues that impact the likelihood of favorably resolving a claim against the disability insurer. They include the nature of the disability (claims based on a psychological illness are denied more often) and whether the policy is an “any occupation” or “own occupation” policy as the insurer’s potential liability as far greater under an “own occupation” policy.
In our experience, the successful resolution of these claims depends primarily on demonstrating to the insurer that we are intent on succeeding and will take whatever steps necessary on your behalf in the court case to do that including proceeding to trial. That is what we do.
If your claim is denied or the disability insurer has advised you that they are going to terminate benefits in the future unless you take some particular step, please contact us for advice.
Business Insurance Policies
There is an increasing volume of coverage denials.
Businesses typically have what are referred to as comprehensive general liability policies which provide coverage for both commercial property and liability risks. Specialized businesses such as developers, construction and technology companies have additional coverages/policies depending on the size and the nature of the business include coverages specifically related to inventories, errors and omissions, fidelity bonds and other specialized coverages.
Property coverages include damages to plant and equipment caused by a variety of risks as well as business interruption coverage to cover losses sustained by the business as a result of damage which affects your ability to conduct business. There are a number of levels of business interruption coverage and a number of disputes typically arise in the compensation for that coverage.
Liability coverages provide for defense costs and indemnity for any monies that have to be paid to a person or company claiming against your business that is covered under the policy. Coverage under these policies can include liability arising from a wide variety of circumstances including your products and completed operations. Coverage issues that arise under this policy can relate to a failure to report a potential claim or the application of one of the many exclusions contained in the policy.
Companies purchase directors and officers liability insurance to protect the organization’s top management from claims made against them in respect of the services they perform as directors and officers.
If your business’ claim is denied, or the insurer is investigating the claim on a reservation of rights basis or otherwise indicated there may be a coverage or other issue in regards to your claim or a claim made against you or your business, please contact us to discuss your case. What we do is ask the right questions and analyze the applicable insurance and provide straightforward advise as to the extent of the problem and options, including litigation, to solve the problem.
Miscellanea:
Mortgage Insurance, executor insurance, professional liability insurance
We can assist clients in the formulation and presentation of their claim in order to facilitate a fair settlement and avoid to the extent possible disputes over valuations and coverage.
We assist clients in the course of the insurance company’s claims investigation process to assist in meeting policy requirements as well as reducing the likelihood of coverage issues arising as a result of the manner in which the claims investigation process was conducted.
For more information, we invite you to contact either Ross McLarty or Murray Wolf to discuss how we can assist you.