Insurance Agent can't collect on her insurance

[wabmester]

Worried about your insurance company going out of business?* *Stop worrying about that.* *Worry about getting them to pay your valid claim:

LA Times Article

Until a few years ago, Debra Potter made sure that her family could cruise the Caribbean, watch the NFL on big-screen TV and keep her elderly mother and in-laws at home in comfort.

She did so by earning $250,000 a year selling more insurance than almost anybody else in the state of Virginia, virtually all of it disability and health policies that she thought put a safety net under middle-class and affluent families such as her own.

Potter so believed in the protection she was providing that she made sure she was covered under a policy her employer, Southeastern financial services giant BB&T, had with UnumProvident Corp., the nation's largest disability insurer.

But when Potter began falling down in 2002 and was subsequently diagnosed with multiple sclerosis, she discovered that the protection didn't work anything like she'd expected.

[azanon]

Another advantage of being a Fed; Federal Blue Cross and Blue Shield. In short, if they wont pay it, no one will.

[maddythebeagle]

Interesting article, thanks for posting. I think most states have insurance regulators that you can complain to for help. I think this article is somewhat sensational (as if most aren’t). I think the insurance company was in the ok to deny (or at least make somebody go through more hoops) on something like this on chronic fatigue syndrome and her doctor said it was "possibly" ms. I think that is a common practice by insurers to deny claims and/or be slow to pay, though.

Another issue, it says she was making 250k a year and they burned through their savings pretty fast. NOT good!

[brewer12345]

Originally Posted by maddythebeagle

Interesting article, thanks for posting. I think most states have insurance regulators that you can complain to for help. I think this article is somewhat sensational (as if most aren’t). I think the insurance company was in the ok to deny (or at least make somebody go through more hoops) on something like this on chronic fatigue syndrome and her doctor said it was "possibly" ms. I think that is a common practice by insurers to deny claims and/or be slow to pay, though.

Depends on the insurer. Considering the hundreds (thousands?) of people suing them the multiple regulatory investigations, etc., UnumProvident is probably "in a class of their own."

[Dawg54]

CBS had a segment on Unum 2-3 years ago on 60 Minutes. It pretty much presented the same info as in the article. Our company used Unum a few years ago as our LTD provider. During this period, we only had one claim and it was approved in a prompt manner. We moved the plan to CNA 2 years ago because of lower rates, but it has not been a pleasant experience. The first claim filed* was denied and only through an act of congress was it approved. I'm affraid claim denials are here to stay.

[Mountain_Mike]

Different kind of insurance (auto) but I've been waiting (and calling, and writing) since late August, 2004 to get my deductable back on a fender bender where we were not at fault.

[maddythebeagle]

who is your insurance carrier, mike? write a letter to your state regulator and cc the company. Sometimes, it makes no sense to argue with some of these folks. It has worked for me on other financial issues with companies.

[Mountain_Mike]

Maddy,

My carrier? I have been told that I am in "good hands," but it doesn't seem that way. They take my money very readily, but are not so forthcoming about releasing it.

It has been so long because first I was patient and did not bug them for the first few months. Turns out the other insurance company protested, so the thing has gone to arbitration. Since then, they have been stringing me along, "this process takes time, we expect to have this finished by next month" ... or within six weeks....whatever. Heck, I could have just taken the other driver to small claims court and been done months ago.

[unclemick]

Except in Louisiana - our regulators have a bad habit of spending more time in jail than on the job

Heh, heh, heh - I actually tryed that once - wrote and called - was politely told to go pound sand - they had more important issues than helping consumers/taxpayers - ?

Louisiana - you gotta love it.

Heh, heh, heh - I read thirty years ago a comparison with banana republics - wonder who has made the most progress

[Nords]

Originally Posted by wabmester

Worry about getting them to pay your valid claim

OK, how many people here feel sympathy for a high-volume insurance sales "expert" who's tripped up by her own company's fine print?

The article does point out that she spent months with the same doctor while he waffled over the diagnosis. It's ironic that, while she's trying to get the company to pay her for being unable to ever work again, millions of MS sufferers are leading productive lives and fighting the symptoms.

I agree that she's entitled to all the benefits of medical insurance. No debate there.

But I don't understand the disability insurance system. Are we paying for a policy that guarantees $250K annual income for the rest of a purported career, or are just paying for limited unemployment & retraining benefits? And is it really possible that bypass surgery means you can never work again in any capacity, or does it just mean that you have to seek a completely different career from the one that may arguably have generated the stressful situation that led to the bypass in the first place? How would millions of other bypass survivors, for example Larry King, feel about this guy's claim of being unable to work?

Surely she understood that she was asking the company to assume the risk of a catastrophic disease or accident that could cost them millions of benefits, and presumably she was able to calculate whether she was paying a reasonable premium for that risk? If the premium was so affordable, shouldn't she have suspected that a claim would be subject to adversarial processing?

Like Maddy I'm also flabbergasted that $250K/year income didn't generate a FIRE portfolio.

[wabmester]

Yeah, I think the example of the agent was perhaps slightly sensationalistic, but I liked the insight into the insurance company's business logic. Seems to go something like this:

- pay small claims, but review larger claims
- if we can, shift the burden to the government
- if we can't do that, find some weasel clause
- if we can't do that, simply don't pay the claim, and let it go to court -- they can't get damages or legal expenses, so screw 'em.

[brewer12345]

Originally Posted by wabmester

Yeah, I think the example of the agent was perhaps slightly sensationalistic, but I liked the insight into the insurance company's business logic.* *Seems to go something like this:

- pay small claims, but review larger claims
- if we can, shift the burden to the government
- if we can't do that, find some weasel clause
- if we can't do that, simply don't pay the claim, and let it go to court -- they can't get damages or legal expenses, so screw 'em.

That works right up intil the state regulators come after you with an axe. I have a lot of issues with California's Garamendi, but you can tell he is an elected (not appointed) official.

[maddythebeagle]

I also would have liked to know if the company actually decided to pay the claim because of the publicity or if this was actually determined to be a valid claim. As usual, the newspaper didnt bother to point this out and would rather just get people's outrage up on the case.

[brewer12345]

Originally Posted by maddythebeagle

I also would have liked to know if the company actually decided to pay the claim because of the publicity or if this was actually determined to be a valid claim. As usual, the newspaper didnt bother to point this out and would rather just get people's outrage up on the case.

FYI, Unum got into a LOT of trouble over this issue. They eventually got themselves in trouble with the regulators of pretty much all 50 states and settled with most of them (not CA and a few other stragglers). The terms of the settlement include changing how they handle claims and going back and reviewing several yers' worth of previously rejected claims.

[Dreamer]

My brother had Unum Ins and he did not have any problems receiving his disability through them. Of course, they did not have to pay for very long either. He died 4 1/2 months after being diagnosed with lung cancer. It is not fun to be disabled and then to have financial problems to worry about also.

Dreamer