Over the last few decades of working with people who have disability insurance claims, we have seen some heavy-handed tactics used both with private policies as well as group policies. Usually, the tactics involve some significant unfairness, and the person who is filing the disability claim has no idea of the potential for abuse which can occur and often does occur.
Insurance companies are very motivated to root out fraud and prevent fraudulent claims from being
filed. There are always going to be bad people out there who file fraudulent disability claims, but let's also not forget there are also bad people out there who work for insurance companies and are often pushed by supervisors to deny claims that should be paid. To deny these claims, they use, what we call, unfair, heavy-handed tactics.
The first heavy-handed tactic is the authorization to obtain and disclose information.
At first glance, the authorization looks very innocuous and is usually included in a package of documents that the insurance company instructs you to sign, so they can process your claim. They will also claim if you don't sign the authorization and send back immediately, then they can't process your claim. Insurance companies usually describe the reason for the authorization as the mechanism they use to obtain your medical records. That sounds fair. Since you're making a disability claim, that usually means you have some sickness or physical condition that is preventing you from performing your occupation, so medical records would be pertinent.
However, this authorization discloses way more than just medical records pertinent to your claim.
Why is an Authorization to Obtain & Disclose Information Unfair?
Most authorizations allow your disability insurer to obtain ANY information from any insurance company, including your homeowners insurance, renters insurance, life insurance.
It doesn't seem that a homeowners' insurance claim you filed 20 years ago would be pertinent to your disability insurance claim; however, an insurance company could use notes that an adjuster made alleging that you were being untruthful to deny your disability claim. More than likely, you wouldn't have any idea that the notes were contained within your file, and you wouldn't be given the opportunity to explain or address the issue before your claim is denied.
Most authorizations release information to MIB, Inc., a vague organization owned and operated by over 400 insurance companies that collects data, not just medical data.
If you didn't say something exactly the same way across the board on any insurance claim filings over the last few decades, then this could go against your disability claim, and you are never given the opportunity to address the false information.
Most authorizations also release information to the consumer reporting agencies, any government agency, any financial institution, any accounting institution, and sometimes, even attorneys.
You're releasing information to consumer reporting agencies, which means they could do a credit check on you in the process of assessing your disability claim, which could negatively impact your credit score exactly when you need it most for the purposes of obtaining loans or other financial assistance until your claim is resolved.
It also releases information to any government agency, any financial institution, and any accounting institution, and sometimes, it can even have a provision that says attorneys can release your information.
The authorization to obtain and disclose information is a heavy-handed tactic that claimants need to watch out for before signing. Many of them threaten at the very end that a failure to sign could be the basis for denying the applicatin or a claim for benefits.
We do not advise our clients to sign these types of authorizations that are heavy-handed and unfair. There is information that insurance companies have a right to see in connection with your disability insurance claim, but claimants also have a right to be treated fairly and honestly.
Whether you or your client needs advice before applying or appealing for ERISA benefits such as long term disability, short term disability, life insurance, pension, or retirement, contact an experienced ERISA attorney at The Martin Law Group at 800-284-9309.
The information presented in this video should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Therefore, no information of any kind that you provide us before such a relationship is created is confidential or privileged.