This week I finished a case where an insurance company had refused to pay the benefits owed under a life insurance policy. Basically my clients’ young son lost his life in car wreck. To help pay for the medical and funeral expenses my clients made a claim for payment on their child’s policy. The claim was denied. What puzzled my client most is that the claim was denied because of something in his sons medical history which was accidentally omitted. Remember this child died in a automobile accident not because of health problems. The insurance company claimed that if they would have had an accurate medical history they never would have insured the child and therefore the legally do not have to pay.
Fortunately, we were able to resolve the case in favor of my client. This did not occur, however, until a lawsuit was filed and significant litigation took place. It amazes me how this insurance company went out of their way to avoid paying this claim. Unfortunately, I have several other cases where insurance companies have denied claims based upon grounds that appear border line frivolous. I can’t help but wonder how many people simply accept the insurance companies rejection. Tennessee does have some modest laws that allow us to punish the insurance company if the denial is made in bad faith. This is often difficult to prove under the law and the financial punishment can be modest in light of the financial power of these companies. Seeing these cases on a day to day basis I truly believe that we should all be discussing “insurance reform” instead of tort reform