Is Fault Considered in Long-Term Disability Claims?

Is Long Term Disability No-Fault Insurance?

Long term disability benefits generally cover someone who has bought a long-term disability policy through an insurance company like CIGNA,  Lincoln financial, UNUM, MetLife, to name a few, or many others. Also, someone’s employer can purchase a group long term disability benefits plan to cover eligible employees. The question of whether long-term disability insurance is no-fault insurance is answered by looking at the policy that either you or your employer purchased. Most policies usually have exclusions for self-inflicted disabilities, such as disabilities which occur during the commission of a crime. Some insurance policies have exclusions related to self harm in the context of a suicide attempt. So in that sense disability insurance benefits could potentially be withheld due to the disability itself being your own fault. However, disability insurance benefits are usually not withheld if it is someone else’s fault that you are disabled.

An example is a car accident. If you have a long-term disability benefits policy, and when that policy is in force you are in a car accident outside of work, you could potentially get long-term disability benefits if you become disabled as a result of that car accident. However, any settlement from the car accident is usually an offset to your long-term disability benefit. 

How Do Insurance Offsets Work? 

An offset means that if you get a $100,000 settlement from a car accident and you have a policy for disability benefits that would potentially pay you $10,000 a month, you wouldn’t get disability benefits for 10 months while that $100,000 settlement is offset. At the 11th month, assuming that you meet all other eligibility criteria, your $10,000 a month benefit would begin. If you had already been paid 10 months worth of benefits from your disability policy, the disability benefits insurance company might ask you for that money back. If you refuse to give that money back, they could either stop your current benefits payments or they could file a lawsuit against you, or anything else that is legally within their power to recover that money. This offset provision is usually in a long-term disability benefits policy, although it is not in all long-term benefit disability benefits policies. So I’d say the answer to the question is that long-term disability benefits insurance is a partial no-fault insurance policy, but in certain cases benefits are withheld if your disability is the fault of you or someone else. 

What Should You Do if You Believe Long Term Disability Benefits Have Been Wrongfully Withheld?

Private long term disability policies through an employer are generally covered by the Employee Retirement Income Security Act (ERISA), a federal statute that is supposed to protect people who apply for Long Term Disability benefits. However, objective observers are usually of the opinion that ERISA actually makes applications and appeals more difficult for an average person. Even privately purchased disability benefits policies have very complex rules. This unfortunately means that most people need to hire lawyers if they are denied Long Term Disability benefits in Maryland or other states by insurers such as Lincoln Financial, UNUM, Reliance (Matrix), Liberty Mutual, Prudential, MassMutual, Mutual of Omaha, etc.

In Maryland, hiring a lawyer to assist you in your fight for benefits is no easy task.  There are few lawyers that have experience with Long Term Disability cases.  Often you will find that the lawyer you’re speaking with only handles Social Security Disability cases, which have completely different procedural rules than Long Term Disability applications and appeals.  The lawyer you choose must be someone with experience in handling Long Term Disability cases specifically. Maryland Long Term Disability Lawyer Emmett B. Irwin has experience in fighting for Long Term Disability benefits and does more than just Social Security Disability cases. 

The fees for lawyers in this area of practice can vary significantly.  The Law Office of Emmett B. Irwin generally offers a choice between a lower “flat fee” up front, or a higher “contingency fee” only if you win your case.  The contingency fee can be from 25% up to 40% of your “back pay”, or benefits that are past due at the time of your award.  Every case is different, and the fee can depend on a number of factors present in your case. In order to learn what fees would apply in your case —  and to get an evaluation of your claim — we encourage you to contact us and schedule a free consultation.