Suing an Insurance Company for a LTD Denial

If you file a claim for long term disability (LTD) benefits, and your insurance company denies your claim, you must first comply with all required administrative and/or company procedures for appealing the denial of your claim.  Once you have exhausted these available remedies, your only recourse may be to continue to appeal the denial of your claim by suing the insurance company in court. 

Common Reasons for Suing an Insurance Company for a LTD Denial

The most common rationale for suing an insurance company for its denial of LTD benefits is to recoup benefits to which you believe you are entitled.  If you have experienced repeated denials of your LTD benefits claim, which can have severe financial consequences for you and your family, then you may wish to pursue a lawsuit for what you perceive to be bad faith on the part of the insurance company for denying your valid claim for benefits.

Filing Suit Against an Insurance Company for a LTD Denial

There are various laws that govern your ability to, and the circumstances under which, you can file suit against an insurance company for a denial of your LTD.  First, most state laws have a statute of limitations, or a deadline by which you must file suit against the insurance company.  Generally, the statute of limitations will begin to run once your initial claim for LTD benefits has been denied by the insurance company.  As a result, it is essential that you keep careful records of your claim and any denials and/or appeals of the claim that occur.  You also must take care to contact an attorney early on in the LTD claims denial process, so that you are sure to comply with any applicable statute of limitations.

Potential Damages Awards and Settlements

The potential damages awards that are available in a lawsuit depend on both federal and state law.  For instance, if a LTD insurance policy is governed by the Employees’ Retirement Income Security Act of 1974 (ERISA), and thus qualifies as an employee welfare benefits plan, then you will not be able to sue your insurance company for punitive damages.  However, even if your policy is an ERISA plan, you still can sue the insurance company for any LTD benefits that you might be owed, along with interest, as well as a portion of your attorney’s fees.  Similarly, other state and federal laws might restrict your ability to recover certain types of damages in specific circumstances. 

Contacting an Attorney for Help

As most state laws place strict time limitations during which you must file suit against your insurance company for denying a claim for long term disability benefits, it is essential that you contact an attorney for assistance with this issue.  Filing a lawsuit against an insurance company requires following extensive, complicated court rules and procedures that are best followed by experienced disability attorneys.  The success of your lawsuit may very well depend on your choice to retain a disability attorney to assist you with your case.