The Kipness Law Firm, P.C


Q: What is the difference between a first party insurance claim and third party insurance claim?

A: A first party insurance claim is a claim made against one’s own insurance policy.  For example, if you have uninsured motorist (UM) coverage on your auto policy and you are injured by an uninsured driver, you can make a claim on your auto insurance policy.  Another example is a claim made against your home insurance for flood or wind damage to your home.  A third party claim is a claim made against an insurance policy that is not your policy but may be provide you compensation for your injuries.

Q: What is “bad faith” insurance claim?

A: A bad faith claim is claim against an insurance company because they refused to pay a claim or pay a full amount of a claim. Insurance companies are required to deal with their insureds and others entitled to insurance policy proceeds in good faith and fairly handle your claim.  When an insurance company does not act in good faith, they may be sued under a “bad faith” insurance claim.

Q: What kinds of “bad faith” claims are there?

A: Types of bad faith claims can arise from:

Q: What types of insurance policies can give rise to a bad faith claim?

A: Auto, homeowner, renter’s, life, disability, commercial property, and commercial vehicle insurance policies can give rise to a bad faith claim.

Q: What is the insurance company’s motive in dealing with insurance claims?

A: Insurance companies are focuses on making profit, which can increase if claims are denied or delayed.

Q: What is a disability insurance policy?

A: A disability insurance policy is purchased to protect one against the loss of their ability to earn income.

Q: What should I do if I have been refused compensation for a disability?

A: You should immediately appeal and contact an insurance claims attorney.

Q: What types of issues arise in life insurance claims?

A: Issues can include whether the death was accidental; if the insurance was effective at the time of death; and whether the insurance premiums were paid.

Q: What if I am receiving social security disability benefits; can I still make a claim on a private disability insurance policy?

A: Yes but private insurance companies use different standards than the social security administration in evaluating claims.

Q: Can I assert a bad faith claim against insurance provided by my employer?

A: Generally, no.  Most insurance policies provided by your employer are governed by a federal law named the Employee Retirement Income Security Act (“ERISA”). You will need to contact an insurance claims attorney to see if the insurance policy is covered by ERISA.

Q: Does ERISA help protect consumers in life, disability, and health insurance claims?

A: No.  To sue for denied benefits you may have to show the insurance company’s denial of benefits was “arbitrary and capricious” which is harder to prove than ordinary negligence.  It requires showing the insurance company was completely unreasonable.  Insurers use this rule to their advantage in denying legitimate claims.  You are also prohibited from seeking punitive damages.  Therefore, the insurance company may deny benefits and hold on to their money, knowing their worst case scenario is that will have to pay benefits.

Q: How does ERISA affect my insurance claim?

A: It outlines what information your employer must give you about your insurance benefits, puts strict obligations on your employer on how to deal with your claim for benefits, and requires your employer to provide you with a full and fair review of an appeal from a denied claim.

Q: How do I know if I am covered by ERISA or a private plan?

A: The majority of employer sponsored insurance is covered by ERISA, including health insurance, disability insurance, and employee benefit plants. ERISA will not apply to health or disability insurance that you purchased outside of your employment.

Q: What if my insurance company tells me my claim is not covered under the policy?

A: Insurance policies are contracts and one must read and interpret the contract terms to determine if the claim is covered.  Policy terms may have different interpretations an attorney may need to advise you if the claim should be covered and what you rights are if the claim is denied by the insurance company.

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