If you’ve recently received a disability insurance denial notice from Guardian Disability, you’re not alone – and you have options. Disability insurance carriers like Guardian tend to deny claims out of hand in the hopes that the claimant won’t pursue the matter further. If a disability insurance claimant does appeal, depending on factors like the type of disability policy and the extent of the disabling injury or illness, the disability claimant may prevail and win an award of back benefits, fees, and costs. Learn more about the legal options available to you after your denied disability claim.
Appealing Your Guardian Disability Denial
First, it’s important to note that there are two different types of disability insurance policies under discussion: individual policies, purchased by an Individual Disability Insurance (IDI) directly from an agency; and group policies, negotiated by an employer on behalf of all employees. These group disability policies are commonly known as ERISA policies, after the Employee Retirement Income Security Act.
Though both individual disability insurance and ERISA policies provide coverage if a claimant becomes disabled at some point while the policy is in effect, the litigation rights conveyed by each type of policy can be very different. An individual disability insurance policy generally permits a claimant to appeal it by filing a state law breach-of-contract claim in a state or federal court; an appeal from an ERISA policy, on the other hand, must be filed in federal court and is governed by federal law. The standard of review applied to the evidence can be different in an individual appeal as compared to an ERISA appeal, as can the type of damages recovered.
Another significant difference between an individual policy and an ERISA policy involves the type of trial available. Those with an ERISA policy must try their appeal directly to a judge, who will make his or her decision after reviewing the administrative (paper) record. Those with an individual disability policy, on the other hand, can request a jury trial where evidence will be presented through witness testimony and exhibits.
What Types of Damages Are Available?
In both ERISA and individual policies, successful claimants should be able to recover past benefits owed, attorney’s fees, and costs. However, those with individual policies have an additional recovery option—punitive damages, or those designed to punish the insurance company for engaging in bad faith. Punitive damages can be a valuable tool in a claimant’s arsenal, as they don’t necessarily have to have any relationship to the dollar amount of actual damages sustained.
Punitive damages are governed by the laws of the state in which the claim is being litigated. Some states have placed caps on punitive damages in breach-of-contract claims, while others have stricter rules as to when a jury is allowed to find that an insurer engaged in bad faith.
ERISA policies, on the other hand, don’t provide for the recovery of punitive damages, no matter how out-of-bounds the insurer’s conduct was. Claimants may want the insurance company to pay for what they’ve done, but this unfortunately just isn’t an option that’s available under the law.
Reaching a Settlement with Guardian
The vast majority of disability insurance benefit appeals settle well before trial. To come to a settlement amount that’s agreeable to all parties, Guardian Disability will look at the amount being sought in past benefits. Because an insurance carrier won’t pay anything if they prevail in court, their focus when deciding to settle will primarily be on past events, not on the prospect of continued future disability.
Generally, a settlement offer will be anywhere from 25 to 40 percent of the perceived value of the claim for an ERISA denial. An individual policy may have a slightly higher settlement threshold, but even when disability is undisputed, an insurance carrier will never pay more than 75 percent of the claim.
A disability insurance attorney can work with you to assess the value of your claim and ensure you’re getting every dollar you deserve. If you need some help navigating your Guardian Disability appeal, look no further than Dell & Schaefer. Our experienced attorneys have navigated hundreds of these claims and know the ins and outs of the process and how to obtain a mutually-agreeable outcome.