Delays in Disability Insurance Claims — At What Point is a Delay Unreasonable?
In Illinois, as in most other jurisdictions across the country, disabled policyholders (and policyholders in types of insurance contracts) are entitled to sue and recover damages pursuant to a bad faith cause of action when the insurer delays in determining coverage, paying out a legitimate claim for benefits, or otherwise processing the claim. Many policyholders may not be aware that their disability insurance claims must be handled in a manner that does not lead to unreasonable delays — insurers have a duty of good faith that applies not just to the determination of whether to affirm or deny coverage, but also to the “speed” of its claim handling.
Delays in the handling of a legitimate disability insurance claim can put a great deal of financial pressure on the policyholder, particularly in situations where the disability insurance benefits are short-term in nature. While a policyholder attempts to recover from their disability, or in cases where the disability is permanent, attempts to adapt to their new and unexpected limitations, they may be left without a means of providing for themselves. The emotional and financial pressures can mount quickly. It’s important to consult with an experienced attorney for guidance during such difficult and confusing times. Here at Bryant Legal Group, P.C., a qualified Chicago bad faith insurance lawyer can evaluate your potential claims.
Unreasonable Delays Give Rise to Bad Faith Liability
Section 155 of the Illinois Insurance Code governs bad faith insurance claims. There is a wide range of conduct that constitutes a violation of section 155, and that therefore gives rise to a bad faith claim against the insurer (including, but not limited, to a failure to communicate promptly or regularly with the policyholder, and a failure to pay an acknowledged claim amount that is due to the policyholder).
Under section 155, a bad faith claim may lie where the insurer’s delay — for example, a delay in failing to respond to the communications of the insured, or in failing to pay out the claim amount that is owed to the insured — is deemed vexatious and unreasonable. Determining whether a delay is reasonable or unreasonable is not particularly straightforward. In doing so, the court will consider the total circumstances, which includes factors such as the attitude of the insurer towards the insured-claimant, the length of time, and whether the insured was compelled by the circumstances to pursue litigation in order to obtain benefits.
We can simplify with a quick example.
Suppose that you are a short-term disability insurance policyholder. After a motor vehicle accident that causes you to suffer serious back injuries (thus disabling you in the short-term and preventing you from working), you submit a claim for disability benefits with your insurer. The insurer acknowledges that your claim is valid, that you are covered, and that they will pay out. The insurer delays in making payments, however, with the intention of forcing you into a situation where you will simply find it too much of a “bother” to attempt to litigate and secure your full compensation. If the insurer pays out after a three-month delay, then you may be inclined to simply avoid conflict and accept the remaining payments instead of attempting to secure the missing months of benefits.
After examining the facts, the court is likely to find that you are entitled to sue and recover damages pursuant to a section 155 claim based on a vexatious and unreasonable delay.
Contact an Experienced Chicago Bad Faith Insurance Lawyer
If you have had your legitimate disability benefits claim unreasonably delayed (in processing or payment) by the insurer, you may have the right to sue and recover damages pursuant to a bad faith claim brought under Illinois law. Successfully litigating bad faith disability insurance claims can be quite challenging, however, and demands the skill-set of an experienced team of attorneys who have built a solid track record of results over the years.
Here at Bryant Legal Group, P.C., our bad faith insurance attorneys have decades of experience providing legal representation to disabled claimants. We are committed to providing top-notch advocacy at every phase of litigation, and to that end, we are willing and able to resolve conflicts through the appeals process with the insurer but will pursue litigation on your behalf if necessary.
Call (312) 561-3010 today to setup a consultation with an experienced Chicago bad faith insurance lawyer here at Bryant Legal Group, P.C.