If you have a long-term disability policy, be sure to read it from cover to cover. Whether it’s a group policy issued to your employer for your benefit or a private policy that you pay for yourself, it is critical that you understand what coverage you have, what triggers coverage, and what your responsibilities are under the policy. While every clause in a long-term disability policy is important, the most important term is arguably the “Notice of Claim” provision.
The “Notice of Claim” Provision
The “Notice of Claim” provision is a contractual term in every long-term disability policy. Insureds are required to give the carrier timely notice of their intent to file a claim; this notice triggers the insurance company’s obligation to investigate the claim. Failure to give proper, timely notice under the terms of your policy can have devastating consequences. In many states, late notice can relieve the insurance company of its obligation to pay your claim.
Notice Deadlines
The notice deadline varies from policy to policy. For example, an old Paul Revere policy provides, “Written notice of claim must be given to us within 30 days after a covered loss starts, or as soon as reasonably possible.” A more modern group disability policy provides, “Written notice of claim must be given to us no later than 30 days after the end of your elimination period.” A disability elimination period, also known as a “waiting period,” refers to that span of time between when a disability occurs and when the policy starts paying benefits. For instance, a policy may have a 90-day elimination period, which means it would not pay benefits for the first 90 days following the onset of your disability. In such a case, under the previously stated notice provision, you are required to give notice within 120 days of the start of your disability.
Partial Disability Benefits
Some policies include coverage for “residual” or “partial” disability, which kicks in if you have a loss of income because you are either limited in performing one or more of your job duties or if you can only perform them for a shorter duration due to your disabling condition. One disturbing trend we are seeing in our practice is the failure of insureds who are entitled to partial disability coverage to provide timely notice. For example, a dentist with mild Parkinsons disease may reduce the scope of her practice by cutting back on certain difficult procedures, leading her to suffer a 30% loss in her income. This reduction in duties may go back for several years, but the dentist may not be aware that her disability policy would pay her for this partial loss. Her failure to provide timely notice after the onset of the partial loss may cost her many years of valuable disability benefits.
Communication with the Insurance Company
Follow your policy’s instructions for submitting your notice of claim, which generally must be done in writing to a proper representative of the insurance company. Document all communications with the insurance company, including dates, methods, and content of notice. When an insurance company believes that an insured has provided late notice of claim, the insurer typically sends a letter asking the insured for the reason it was late. If you receive such a letter, consult an attorney who is experienced in disability law prior to responding.
Contact Schwartz, Conroy & Hack PC if you have questions about your long-term disability policy, if you have received a letter about a late notice of claim, or if your claim is being challenged or has been denied. We have the expertise, experience, and tenacity to make insurance companies keep their promises to policyholders like you.
