It is a more routine practice from insurance companies than you’d think. You sign up for a policy, filling out the complicated forms to the best of your ability. The insurance company gives you a policy, takes your premium payments for months or years. Then, when you get in an accident and truly need the policy, your coverage is suddenly dropped because of something they claim is a “material misrepresentation” of your personal information on your application. Most likely, this misrepresentation is only a product of your inability to understand the form, and as long as you were paying them the company did not bother to investigate your information. However, as soon as it was their turn to pay, and the cost was beginning to exceed the profit from your premiums, suddenly it became worth it to investigate the case.
Such was the case of a California man who was involved in a car accident. The man paid premiums for insurance with Blue Shield of California, and was never questioned about his application or given a chance to clarify or correct any misinformation, until he needed medical care, as much as $450,000 in medical care. Then, the company not only canceled his policy, but demanded that he repay the $104,000 that it had spent on his behalf.
Although the denial of coverage was approved by a lower court, a California appeals court has overturned the finding, sending the case back to a lower court and saying that the insurance company must prove that the policyholders willfully meant to deceive the insurance company or that the insurance company routinely investigated all policies before granting them (instead of only investigating ones that might prove expensive) in order to deny coverage on the basis of incomplete applications.
Insurance is supposed to make you secure, but these days the only ones made secure by it are the company’s shareholders. Taking your insurance company to court, is, sadly, one of the few ways to make sure it upholds its end of the contract you signed. If you or someone you love has been denied coverage due to bad-faith insurance practices, contact the Personal Injury Lawyers, P.C. today to get in touch with an experienced bad faith insurance lawyer.
