A long long time ago I read a book by John Grisham called "The Rainmaker".
The book described how a fictional insurance company had determined that it was far cheaper to cut people off of Long Term Disability Benefits and then deal with the fall-out, rather than keep them on claim. It talked about the calculus of the percentage of people who would simply do nothing in response, the percentage that would miss deadlines to fight, the lesser percentage who would hire a lawyer but then settle for a reduced amount, and finally the tiny minority that would fight to the end and get their benefits back or a larger payout.
When I started practicing back in late 2002, I was happy to see that the Long Term Disability insurance carrier's treatment was nothing like what was being described in the book south of the border. However, my personal perspective has been changing......
In more recent years, some of the potential clients who come to me have, in my opinion, mind-boggling denials. Denials for people approved for CPP disability by the government, (otherwise healthy) parents (with excellent work histories) suffering from major depression after finding their child hanging from a rope having committed suicide, denials where the insurers own doctors have said that someone can't go back to work, and denials for people that are so clearly disabled that it would take a deaf mute drug addict of a claims adjuster to conclude otherwise (to be clear, there are some great insurers out there, and some that fix mistakes when they find them....but others don't always do so - they will remain nameless so that I don't get sued).
I have seen insurance companies generally target claims where they do not see an "objective" reason for the person to be off of work. They often cut off people with pain issues, psychological syndromes and other disorders that are less capable of verification with any certainty.
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In reality, many of the denials that I put in the "shake my head" category may simply be the result of adjusters who perhaps do not read the complete file due to time restrictions or other pressures, adjusters who haven't had the chance to meet (or really get a sense of) the insured, or simple inadvertence. That is pure speculation on my part, but I do know that most of the adjusters that I meet are good people and don't seem to want to do anything unjust intentionally.
In recent times, I find myself more and more just shaking my head and telling clients that I simply cannot understand a denial and confirming that it obviously wasn't a fair denial. In some cases, my clients are concerned that there may be some behind the scenes pressure being applied by an employer whose premiums may be impacted, or other such factors. But that is where my indignant comments have to turn to explaining procedure and outcomes.
The truth is that the law in our Province does not afford us the level of punitive remedies against insurers that might discourage this kind of behavior. Claims for punitive damages are not compensated in the Courts in the way that they should be to appropriately discourage the financial behemoths that insurance companies have become. As a result, insurers can often simply offer a reinstatement of benefits if they find considerable push-back on their denial, without too much concern about a serious reprimand. The insurers know that they are effectively operating with a safety net, because most claimants are going to accept a reinstatement if offered, rather than fight forwards through lengthy litigation and the uncertainty of a trial.
I try to prepare my clients for the road to come and what the possible options will be. The road that our law affords is bumpy and imperfect, but it's also the only available path forwards. Knowing what is in front of us, makes it a bit easier to tolerate the bumps.
**Steven Polak is a long term disability benefit denial lawyer in Whitby Ontario and Toronto (GTA) Ontario.