What’s In A Name? The “Superstorm” Formerly Known As Hurricane Sandy

Now that the power is finally back on for millions of American homes and businesses affected by Superstorm Sandy, homeowners and flood insurance claims are pouring in at a record pace.  Consumers and businesses alike need to be aware that insurers are going to do everything possible to minimize their losses, and it is likely that a large number of claims will be sharply reduced or denied outright.

Homeowners’ insurance companies have gotten tougher as weather has become more extreme.  As New York Governor Andrew Cuomo said, “It seems we are having a hundred year flood every two years!”  In response, insurers have raised rates, carved out some coverage, and tucked in new wind and hurricane exclusions and deductibles.  Unlike regular deductibles that require homeowners to pay a set deductible of $500 or a $1,000 dollars, for example, hurricane deductibles are typically based on a percentage of the property’s value.  In other words, a policyholder with a house worth $400,000 and a hurricane deductible of 5% may have to pay the first $20,000 dollars in damages before insurance payments will kick in.

Fortunately, Governors Chris Christie of New Jersey, Dannel Malloy of Connecticut and Cuomo of New York have been clear that Sandy did not make landfall as a Category 1 hurricane.  It seems that the insurers agree.  According to Robert Hartwig, President of the Insurance Information Institute, Sandy’s sustained wind triggers were not met and all policyholders should be exempt from their insurers’ hurricane deductibles.

There are still many other pitfalls, though, which could derail the processing of your Sandy related claim.  For instance, many insurers now have “anti-concurrent causation clauses” (try saying that three times fast) that state if damage occurs from multiple causes, such as wind and flooding, and only one cause is covered, the policyholder gets nothing at all.  Ouch!!

The bottom line is that insurers and policyholders are about to engage in an epic battle relating to the payout of over $20 billion of insured claims from damage caused by Sandy.  As a result, it seems that a “Sandy” mountain of litigation can’t be far off.  If your homeowners’ insurance claim has been denied, contact the experienced attorneys at Lee DiGeorge Law for a free consultation, or visit www.leedigeorgelaw.com for more information about how we can help.

Don’t Be A Two-Time Victim of “Superstorm” Sandy

With millions of victims along the eastern seaboard suffering an estimated $50 billion in total losses, there will soon be an explosion of denied homeowners claims as insurers scramble to cut their losses.  Insured consumers and businesses should take proactive measures to increase the chances that their claims will be processed properly, and not unfairly reduced or wrongfully denied.

Even consumers and businesses with adequate coverage and properly documented claims could run into difficulty due to a shortage of money to cover the enormous amount of insured losses.  According to the Consumer Federation of America (CFA), payments by private insurers for wind damage from Hurricane Sandy will likely exceed $10 billion.  Flood claims paid by the National Flood Insurance Program (NFIP) will also likely exceed $10 billion, exhausting the NFIP’s existing $4 billion in payment authority.  To make up for this shortage, FEMA is authorized to borrow up to $500 million with an additional $1 billion available with Presidential approval.  The CFA’s Director of Insurance, J. Robert Hunter, says that “even combined, these borrowings will be insufficient to pay all flood claims related to Hurricane Sandy.”

One thing is clear, whether the result of fund shortages or otherwise, many people will either receive coverage denial letters or checks for far less than they expect.  If this happens to you, seek the counsel of a law firm that focuses on representing consumers and businesses against insurance companies.  The homeowners insurance attorneys at Lee DiGeorge Law have a track record of success in representing insured clients, and we practice exclusively in the area of consumer protection.  Visit www.leedigeorgelaw.com for more information on getting your free case evaluation now.

State Probes Into Wrongful Life Insurance Practices May Lead To Your Lost Policy

The nation’s largest life insurance companies are feeling the heat as some states investigate wrongful insurance practices, particularly with respect to locating beneficiaries after an insured has died. In fact, it is estimated that tens of thousands of life insurance beneficiaries have been deprived of approximately $1 billion (or more) in unclaimed proceeds. Many of the life insurance companies currently under fire continue to claim that it is the sole responsibility of the beneficiary to notify the company of an insured’s death.

Life insurance beneficiaries often do not know a policy exists, however, and may not be in the best position to find out. Sometimes beneficiaries know about a loved one’s policy but do not know which life insurance company to contact and are unable to locate the policy documents.  Even worse, life insurance companies may mislead a beneficiary who does not have a copy of the policy and deter the filing of a claim.  When thousands of policies go unclaimed every year, insurance companies just sit on the money.

But a life insurance company does not know when an insured has died, right? Wrong. State probes revealed that these companies have routinely checked the Social Security Administration’s ‘Death Master File’ for decades to discontinue annuity payments.  Until recently, life insurance companies never used the same source to notify beneficiaries of unclaimed policies.

In the past several months, multi-state settlement agreements have been reached with leading life insurance companies, including Prudential, John Hancock, and Metropolitan Life. The States of Pennsylvania, New Jersey, Colorado, New York, California, and Florida are among the leaders of these probes. As a condition of the agreements, participating life insurance companies will be required to improve their practices and make better attempts to locate the beneficiaries of unclaimed policies. The problem with locating past unpaid beneficiaries, though, remains.

The issue that state regulators are not addressing is the inability to locate older records of unpaid policies. Life insurance companies are only required to keep records of “terminated” policies for a certain period of years. Consider that when an insured dies and a life insurance company no longer receives premium payments, the policy will be treated as “terminated.”  Years later, because these policies are not properly held as unclaimed property, the records are destroyed, leaving the beneficiary responsible for proving the life insurance company’s liability. Of course, if the beneficiary had such proof, the claim would not have been delayed.

If you believe that an insurance company owes you money, speak to a life insurance attorney about your options right away. The experienced life insurance lawyers at Lee DiGeorge Law help locate unclaimed policies. We will assist you in filing your life insurance claim, demanding that the company pay you immediately and with all applicable interest accrued as a result of the delay. Our life insurance lawyers work aggressively to collect wrongfully delayed and denied life insurance claims.  Call (800)403-5710 for a free claim evaluation today.

Common Reasons For Delaying and Denying Life Insurance Claims

Approximately 5,000 life insurance claims are denied in the United States every year, and even more policies go unclaimed.  People are usually surprised to discover that life insurance companies can delay or deny claims for many different reasons.  In fact, most people believe that when an insured passes away, the beneficiary receives a payout immediately.  Unfortunately, this is too often not the case.  Like most businesses, life insurance companies are motivated by profit, having a strong financial incentive to collect premiums but later deny as many life insurance claims as possible.

DELAYED LIFE INSURANCE CLAIMS

If a life insurance company has failed to promptly issue payment of your life insurance proceeds, you may have a claim for breach of contract and bad faith insurance practices.  Life insurance companies must investigate your claim within a reasonable period of time, usually within sixty (60) days of the claim being filed or in accordance with the life insurance policy terms.  An insurance company may attempt to discourage you from hiring a life insurance lawyer by wrongfully delaying your life insurance claim, offering a reduced settlement amount, or making other efforts to avoid paying the full claim amount.

Some common tactics that life insurance companies will use to wrongfully delay your claim include but are not limited to the following:

Insured’s Death Occurring Within Contestable Period
Hospital Records/Medical Documentation Not Yet Received
Hospital or Medical Provider Refuses to Release Records
Failure to Provide Income Tax Returns
Failure to Provide Non-existent Medical Documentation
Independent Investigation Based on Suspicious Cause of Death
Independent Medical Review to Dispute Evidence
Beneficiary Dispute Based On Divorce
Beneficiary Dispute Based On Suspicious Cause of Death

You should never accept a settlement offer without the advice of an experienced life insurance attorney because an offer to settle your claim for a reduced amount may indicate that the insurance company’s reason for delaying or denying your claim is illegitimate.

DENIED LIFE INSURANCE CLAIMS

To discourage beneficiaries from pursuing a wrongfully denied life insurance claim, life insurance companies will mail complex denial letters that may be designed to confuse you.  Life insurance companies know that you are likely unfamiliar with the life insurance contract itself, or with your rights as the beneficiary.

Some common tactics that insurance companies will use to wrongfully deny your claim include but are not limited to the following:

Policy Lapse Due to Nonpayment
Misrepresentations Regarding Age, Employment and/or Income
Failure to Disclose Immaterial Pre-Existing Medical Condition
Failure to Disclose Medical Appointments/Regular Check-Ups
Failure to Disclose Unknown/Unofficial Medical Diagnosis
Failure to Disclose Condition Requiring Future Treatment
Failure to Disclose Prior Alcohol, Drug, or Tobacco Use
Failure to Disclose Criminal History on Application for Insurance
Accidental Death Related to Independent Medical Condition
Accidental Death Actually Self-Inflicted
Accidental Death Caused by Alcohol/Drug Use or Crime
Accidental Death Not Occurring Within Specific Time/Date
Accidental Overdose Caused by Misuse of Medication
Policy Not Active Due to Death Occurring Prior to Effective Date
Policy Not Active Based on Period of Limited Activity Exclusion
Independent Investigation Based on Suspicious Cause of Death
Insufficient Evidence to Show Heart Attack
Independent Medical Examiner Disputes Evidence
Change In Health After Policy Lapse Due to Nonpayment
Change In Health Condition Prior to Effective Date of Insurance
Handwriting Expert Claims False Application Signature
Failure to Elect and/or Qualify for Employment Coverage
Failure to Convert Employment Coverage to Individual Policy
Insurance Company Not Responsible for Agency Errors
Insured Not Resident of United States on Date of Death
Failure to Properly Change Beneficiary
Policy Lapse Due to Depleted Cash Value

Many insurance companies have large legal departments prepared to defend denied life insurance claims, which can discourage a beneficiary from hiring a life insurance attorney, appealing a denied life insurance claim, or filing a law suit.

The life insurance lawyers at Lee DiGeorge Law are familiar with the various tactics used by life insurance companies to delay and deny life insurance claims, and we are experienced in pressuring insurance companies to quickly complete the claims process and pay all proceeds due under their life insurance policies.  If your life insurance claim is being wrongfully delayed or denied, we will contact the insurance company to demand immediate payment of your claim, including all interest accumulated during the duration of the delay.  Our life insurance lawyers are prepared to file a law suit on your behalf if the insurance company still refuses to resolve your claim, even after receiving our demand to pay you immediately. If your life insurance claim has been delayed or denied, you should ask a life insurance lawyer  about your case today.

Don Cornelius’ Ex-Wife May Collect $300,000 In Life Insurance Benefits Despite Suicide

The recent suicide of Don Cornelius and subsequent reports that his ex-wife, Viktoria Chapman Cornelius, is entitled to collect approximately $300,000 in life insurance benefits has caused a great deal of confusion.  Many of us wrongly assume that an act of suicide automatically precludes recovery against any life insurance policy.  In fact, no such “blanket” exclusion exists in life insurance law, and whether a beneficiary will collect life insurance proceeds following a suicide ultimately depends upon the terms of each policy.

On February 1, 2012, TMZ made a misleading report that Viktoria Chapman Cornelius has “score[d] huge life insurance payout” based on California law.  According to the TMZ Article, the ex-couple’s divorce decree provides that Viktoria was to remain beneficiary of two life insurance policies, and “[u]nder California law, if a policyholder commits suicide within [two] years of the time the policy is issued, the company can deny payment.”  TMZ prematurely concluded that because Don Cornelius took out the policy more than two years ago, Viktoria would undoubtedly collect the life insurance proceeds.  However, her right to the subject benefits cannot be confirmed without a thorough legal review of the life insurance contracts, and any reports based solely on “California law” are unfounded.

Typically, life insurance policies do expressly deny coverage for death by suicide, and such policies contain an exclusionary clause and often a definition of suicide.  For example, life insurance contracts may include a provision similar to the following: “If the insured, whether sane or insane, dies by suicide within two years from the date of the policy, no benefits are payable.”  These exclusions are generally recognized as valid.

An issue surrounding death by suicide arises, with or without an exclusionary clause, under Accidental Death & Dismemberment policies.  The concept of denying AD&D coverage for suicide is easier to understand because an intentional taking of one’s life can hardly be considered an accident.  In most cases, though, the life insurance company has the burden to prove that an insured’s death was committed with the requisite suicidal intent, and a mere intent to inflict pain which results in death will not be sufficient.  Indeed, numerous life insurance cases have involved an insured’s death caused by “erotic asphyxiation,” or the act of intentionally choking oneself or otherwise restricting oxygen to the brain for sexual gratification.  Under these circumstances, a self-inflicted death will not be considered an intentional suicide for the purposes of life insurance coverage.

Thus, while Viktoria Chapman Cornelius may collect the full $300,000 in benefits, additional information about the specific terms of Don Cornelius’ life insurance contracts is required before a proper determination can be made.  The life insurance lawyers at Lee DiGeorge Law will continue to follow this story and others relevant to denied life insurance claims and developments in the area of life insurance law.

Don Cornelius was a pioneer whose enormous contribution to music, television, and popular culture will always be remembered and appreciated.  He is best known for his creation of “Soul Train” and its national exposure and tribute to decades of black artists and icons.  Don – wishing you eternal love, peace, and soul…

Feds Immune from Federal Employees’ Group Life Insurance Act (FEGLIA) Lawsuit for Loss of Beneficiary Designations

In Graber v. Metropolitan Life Insurance Company, a lawsuit against the United States and Metropolitan Life Insurance Company to obtain the life insurance benefits of a deceased federal employee, a U.S. District Court in Ohio ruled yesterday that the federal government has sovereign immunity for the improper maintenance of life insurance beneficiary designation forms.  The dispute arose when Metropolitan Life Insurance Company denied a life insurance claim filed by the insured’s surviving spouse and subsequently issued payment of the benefits to the insured’s brother.  Met Life based its decision on the insured’s incomplete personnel file, which contained a form designating the brother as sole beneficiary in 1996 but lacked any record of the insured’s request in 2008 to change the beneficiary to her husband.

Under the Federal Employees’ Group Life Insurance Act, the United States has waived sovereign immunity for any “breach of legal duty owed.”  Although the federal government was responsible for maintaining the insured’s personnel file, the District Court’s holding that no duty exists to properly maintain FEGLI records precludes recovery, as the federal government has not unequivocally consented to be sued for the loss, misfiling, or misplacing of beneficiary designation forms.

Sound like a bunch of nonsensical legal mumbo jumbo?  Well, that’s debatable… even federal courts are somewhat split on the issue.  Prior to the Graber decision, the Fifth Circuit concluded in Metropolitan Life v. Atkins that the federal government does have the duty to properly maintain beneficiary designation forms in the care of its FEGLI personnel clerks.  Yet, other federal courts limit the United States’ duty under the Act to only negotiating and issuing the correct FEGLI life insurance policy.

The lesson to be taken away from this discussion is two-fold.  First, if you are a federal employee with group life insurance benefits, follow-up on any beneficiary designations to ensure that your personnel file accurately reflects your intentions.  And most importantly, always consult with a life insurance lawyer about your denied life insurance claim or beneficiary dispute.  Until the Supreme Court picks a side, every “designated” beneficiary deserves to make their case.

The full court opinions referenced in this post can be found here —–> Graber v. Metropolitan Life ; Metropolitan Life v. Atkins .

For additional information on how a life insurance lawyer at Lee DiGeorge Law can help you, visit www.leedigeorgelaw.com and www.life-insurance-law-firm.com.

Interim Coverage Granted For Insured Who Died Prior To Policy’s Effective Date

If an insured passes away prior to a life insurance policy’s effective date but after the first premium payment, the insurance company will likely deny the beneficiary’s life insurance claim.  This makes sense to many of us, and to many state legislators, as the application for life insurance must generally be approved before an insurance company accepts the insurance risk.

In some states, though, temporary or interim coverage is recognized when insurance companies collect premiums on the application date but fail to clearly explain the delay in life insurance coverage.  In Pennsylvania,  Lee DiGeorge Law recently won an administrative appeal after a major life insurance company denied a claim based on the alleged “inactive” status of a policy.  The insured, who suffered an unexpected heart attack less than one week before the policy’s “effective date,” was never properly notified of any delay in coverage even though the insurance company eagerly accepted the first premium payment.  With the assistance of an experienced life insurance lawyer, the insured’s policy was reinstated and the claim properly reviewed.

Under these circumstances, an insurance company is still entitled to conduct a standard review of the application upon reinstatement because the insured’s death will have occurred within two (2) years of the policy’s effective date.  For more information on how a life insurance attorney can help you with a similar or other life insurance denial, visit www.leedigeorgelaw.com and www.life-insurance-law-firm.com, or contact 800.403.5710 for a free consultation.