“Peace of Mind” Coverage
When you are injured or otherwise unable to work, having disability coverage provides for corresponding disability benefits can offer peace of mind such that you know the financial stresses arising from your disability will be eased, at least in part. In fact, the Supreme Court of Canada has found disability benefit policies to be “peace of mind” policies, thus triggering a higher level of good faith obligations from the insurance company, even beyond similar obligations found to arise from other types of insurance policies.
Insurance companies are entitled to reasonably reject claims that are not covered by a policy and the onus (burden) to establish that your claim fits within the policy rests with you (the disabled person) to show that you meet the definition of disabled within the policy and thus are entitled to receive benefits. While all insurance policies are different, often the definition of disabled will be that the insured is unable to perform the tasks of her or his own occupation.
To establish that you are in fact disabled, what is typically required is objective medical evidence that the insured meets the applicable definition of disabled. Medical evidence can come from various sources, including your family doctor, specialists, physiotherapists, and other medical professionals. You should gather as much of this information as you can as it relates to your disability to provide to your insurance company.
Insurance companies may require and seek further medical information to substantiate your claim.
However, the information requested needs to be reasonable and needs to be necessary to prove you meet the definition of disabled.
When obtaining medical information to substantiate your claim, or responding to a denial of benefits, it is essential that you are aware of the various limitation periods that may be at play. Within the insurance policy, there may be appeal periods for which you must respond to a denial of benefits if you wish to do so in the internal appeals processes outlined in the policy. Often the internal appeal period is thirty (30) days but please review your policy as these periods vary from policy to policy.
Additionally, Prince Edward Island’s Insurance Act outlines a maximum one (1) year period from the time you are entitled to receive payment under the policy to commence a Court action if your insurance company denies payment. The one year period is typically found in insurance policies; however, some insurance policies do provide a longer period to commence a Court action.
If your claim is rejected by your insurance company without cause, or providing reasons for doing so, in the face of medical evidence which would appear to establish eligibility for benefits, your insurance company runs the risk of attracting a claim of bad faith and corresponding aggravated and/or punitive damages. Aggravated and punitive damages are meant to guard against the most egregious conduct; however, due to the “peace of mind” nature of disability insurance contracts, the possibility of this type of damage arising in an improper denial of disability insurance is increased.
If you are dealing with a denial of disability benefits and/or feel your insurance company is treating you unfairly, the lawyers at Key Murray Law practicing in the area of personal injury law would be happy to discuss your rights, obligations, and options with you at a no fee initial consultation.
Richard A. Collier
Legal information appearing in this article and elsewhere on Key Murray Law’s website is intended for informational purposes only and is not intended to substitute for or replace any legal or other professional advice. If you have specific concerns or a situation in which you require legal advice, you should consult directly with one of our lawyers.