Michigan Long Term Disability Insurance Lawyer Blog

Another bad faith verdict against Allstate is upheld by the Missouri Court of Appeals reported the Kansas City Star. This time it looks like it is going to cost Allstate a cool sixteen million dollars. Apparently, Allstate failed to respond to a demand in a case where its insured caused a head on collision leaving the two claimants in the hospital for 35 and 40 days respectively.

According to the article Allstate first tried to argue that it never received the demand. When that didn't work Allstate tried to argue that it wasn't sure that the crash had actually casued the injuries. Neither the jury nor the Court of Appeals was buying that story. I am not sure, but maybe because the claimants had to be cut out of the wreckage and were flown by helicopter to the hospital and received intensive care.

It certainly makes this writer wonder just how much money Allstate has that it can get hit in the pocketbook like this and keep doing what it is doing. Maybe Allstate is spending all its money on those commercials with that distinguished looking actor trying to convince everyone that "you are in good hands" instead of settling meritorious cases?

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At least they weren't ranked as the worst insurance company for consumers. (That award goes to Allstate.) Long Term Disability Insurer-Unum was ranked second from worst in a recent study cited by the SunHerald.com. Despite agreeing to pay a massive fine and review thousands of its Long Term Disability claims decisions in a Multi-State Regulatory Settlement Agreement, Unum was still ranked near the absolute bottom of insurers.

According to the article Unum earned a profit in 2007 of more than 679 million dollars while paying its CEO a whopping 7.3 million dollars. Unum was joined in the study by Allstate, AIG, State Farm and Conseco as the most anti-consumer insurance companies in the U.S.

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A recent Court decision applying the ERISA statute determined that a beneficiaries claim for life insurance benefits must be dismissed.

Melissa Amschwand and her husband-Thomas did everything they were told to maintain Tom's life insurance when he was diagnosed with terminal cancer. After he died and his widow applied for his life insurance benefits they were told for the first time that Tom needed to have worked a single day in order to trigger his life insurance benefits. What is really egregious is that prior to his death, Tom and his wife repeatedly asked for a copy of the policy to make sure that he was covered. The company never provided the requested information. In fact, the company repeatedly assured Tom and Melissa over the phone that he was covered.

After he died, the company dropped the bomb on Melissa that Tom had failed to satsify the "Active Work Rule" which required that Tom work a single day to trigger the life insurance policy. Instead of paying the life insurance benefit of over $400,000 the company merely refunded the life insurance premium amount.

This case is yet another classic example of the legal morass created by the court's interpretation of ERISA. A statute that was intended to protect an employee's right to recive employer provided benefits has now been officially turned upside down.

I would strongly encourage anyone who thinks this type of injustice should be prevented to contact their congressional representative.

See this write up by Mark Sherman of the Houston Chronicle for more information.

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