Tactics of Insurance Companies

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In several of our earlier blog posts, we addressed the importance of contacting a personal injury lawyer if you are injured. A personal injury lawyer is experienced in dealing with such cases and knows how to handle insurance companies who could take advantage of your lack of knowledge about your rights and claim procedures.

In many cases, insurance companies will try to negotiate the lowest possible payment in order to escape full responsibly and maintain their profits.

Case example

In the case of Fernandes v. Penncorp Life Insurance Company, an everyday working class individual faces his insurance company, who grossly mishandled his claim.

Mr. Fernandes was a bricklayer who ran his own successful bricklaying company. He unfortunately got injured twice over a period of two days, which led to significant injury to his back in December, 2004.

His company had to be shut down and he filed for disability insurance which he had purchased from an insurance company two years prior. There were two categories of disability that were defined in his contract.

  1. "Total disability" was described as any injury which prevented him from being able to work in his field or any other field."  He also has to be receiving regular care from a physician. It provides a monthly benefit payout for the first two years, then is continued based on the continued complete inability to work within the field for which he has mental, educational and physical skills.
  2. "Partial disability" referred to any injury which rendered the individual unable to complete one or more tasks related to their employment. It had a maximum coverage of four months for any individual accident.

Below is the series of documented correspondence and events that followed.

After both of Mr. Fernandes' injuries, he first received care from a doctor from at an urgent care facility and then from his family doctor who concluded that due to his injuries, he could not work as a brick layer at least for the next two months.

He filed a claim for disability late January of the following year, requesting payment from the date he saw the first doctor. A claims advisor started the total disability benefit payments covering the time period requested after Mr. Fernandes informed her that he had not been able to work at all for that time.

The following month of March showed no significant improvement in Mr. Fernandes and was so expressed by his doctor to the claims advisor. Payments were again made to cover the January though to March period. 

The following month passed with a worsening change. The plaintiff shared that he had tried continuing in his line of work quite unsuccessfully and now is in need of further medical care as validated by his physician.

He was paid for the March - April period.

In May, the insurance adjustor secured surveillance services for the purpose of interviewing and later monitoring Mr. Fernandes. She also made arrangements for an independent orthopedic surgeon to examine the claimant.

The investigator was told by Mr. Fernandes (the respondent) that he could not work and that his doctor guessed that recovery may be possible at the end of June that year. The independent medical doctor surmised that the patient would not be able to work and would need more in depth testing to get a more specific diagnosis.

Both reports were sent to the claims adjustor by early June and when asked by the respondent for a copy of the results from the medical examination with their independent doctor, she declined, informing him that it could not be disclosed directly to him. She assured him that it would be sent to his family doctor but that was never done. She did however, pay Mr. Fernandes for the April through June period.

Again, Mr. Fernandes attempted to work in the latter part of June but was unsuccessful. His family doctor's prognosis then was that he would not be able to work in that profession anymore. Medical exams revealed a problem with his spine and treatments were ongoing.

This was relayed to the claims adjustor who granted benefits for the period of June-July.

In August, Mr. Fernandes was surveilled for three days, the first of which he was seen engaging in physical tasks (shovelling and bending) for less than two hours. The other days produced no sign of him doing any physical work.

After reviewing the investigator's findings, the claims adjustor decided to discontinue payments for total disability in August. In her opinion there was no medical evidence supporting the claim that Mr. Fernandes could not work and furthermore, she was no longer receiving any information from his doctor.

In October of 2005, the adjustor received a report from Mr. Fernandes' family doctor again stating no improvement in his condition and there was no telling when he would be able resume any of his usual daily activities. Around that time, the plaintiff tried again to work in his profession but was unsuccessful.

In early and late November of that year, Mr. Fernandes was again surveilled and was observed driving his vehicle and not doing much of anything else.

Sadly around the middle of November, he was involved in a vehicular accident where he sustained injuries to his neck and shoulder. Within the first week of December 2005, Mr. Fernandes submitted a claim for continued coverage of his benefits from July and also completed a form which outlined the repetitive, physical and arduous nature of bricklaying work.

Late in December, the adjustor noted that she had a meeting with Mr. Fernandes and discussed the evidence she obtained of him working that one particular day. She informed him that entitled him to partial disability benefits, not total disability benefits and tried to resolve the claim with that intention. She based her conclusion on the surveillance evidence and the fact that Mr. Fernandes tried to work in his field on different occasions, even though they were unsuccessful. Mr. Fernandes however, insisted that he was totally disabled.

In February of 2006, the adjustor received more surveillance footage of the plaintiff undertaking physical tasks such as shovelling and unloading boxes.

In July of 2007, Mr. Fernandes filed suit against the insurance company. He was seeking compensation for damages, reimbursements of premiums paid in error and mental and punitive damages. The insurance company challenged the entire claim.

During the process, they received more medical information from their independent doctor stating that Mr. Fernandes could not return to work as a bricklayer. In court, the claims adjustor admitted that by the end of 2010, they were aware that the claimant was totally disabled and only agreed to supply the benefits in September of 2011.

Based on the evidence at hand, the Judge needed to ascertain whether or not Mr. Fernandes was incapable of working is his field or any related field afforded by his education and experience from the date that the insurance company was made aware that he was totally disabled (December 2006). He also had to consider whether the specific elements of damages were proved.

The trial Judge found favor in the plaintiff.

He concluded that the surveillance videos showed only light work being undertaken on a few days vs the majority of the tapes which showed the plaintiff doing no significant strenuous work. He saw that all medical opinions, including from the insurance firm's own independent doctor all surmised that Mr. Fernandes was totally disabled.

The Judge granted his claim for damages for the breach of contract, punitive damages and the return of his premiums. Concerning his damages for mental distress, the trial Judge agreed that Mr. Fernandes' stress and humiliation was accumulated by the insurance company's refusal to pay what they were contractually bound to; but it was not the only factor contributing to his mental state.

He awarded the plaintiff five times the amount that he requested, but it was overturned in the Appeals Court based solely on the fact that mental damages need to be compensatory and not punitive. The trial Judge gave no reasoning behind his increasing the amount so significantly and other mental distress damages in similar cases were usually around what the plaintiff asked initially.

The Insurance Company also challenged the amount awarded for punitive damages in the Appeals Court. They claimed that the adjustor acted within reasonable rights and made informed decisions based on the information and evidence she had at the time.

The Judge however disagreed and maintained the trial Judge's initial reward for punitive damages, pointing out that the defendants received continued information supporting the plaintiff's medical status and chose to ignore it, totally mishandling his valid claim. He saw that they acted in bad faith and upheld the amount awarded.

It is very important that you seek advice from a reputable personal injury lawyer as soon as you are able. At Gluckstein Lawyers, the initial consultation is free and we are fully staffed and ready to represent you.

The Insurance Company, as in this case, purposely tried to deny a valid claim and tried to coerce a lower settlement to escape their contractual obligations.

Do not allow this to happen to you. Call us today.


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