California Insurance Claim Denied, Stiffed Senior Seeks Help

June 7, 2013, 10:30AM. By Gordon Gibb

Palm Springs, CAThere are various examples of affronts to California insurance law, from denied disability insurance claims to relatively small claims for travel insurance. The commonality, regardless of how large or small the claim, is the appearance that insurance companies tend to make policyholders jump through hoops in an effort to achieve a successful claim. Large or small, the tactics deployed to delay or deny are consistent, with the tendency for most insurance providers to pay out only when they absolutely have to…

Take the case of Barbara Butkus, an 80-year-old pensioner from Palm Springs who booked a flight last fall to attend a family reunion in Washington, DC. Given previous health issues, including a heart attack in 2003, from which she had successfully recovered, Butkus waited until a month before the reunion to book her flight. She also, in spite of a fixed income, prudently purchased travel insurance, in case, for any reason, she was not able to travel at the appointed time.

As it happened, according to columnist David Lazarus writing in the Los Angeles Times (4/23/13), Butkus began experiencing shortness of breath just before the trip, and she was advised not to travel. Housebound, Butkus dutifully filed a claim with Allianz for a refund of her ticket cost, which was $451.20. Living as she does on Social Security, together with a small pension, the 80-year-old could ill afford losing such a sum of money.

But Allianz denied her claim, and Butkus went looking for some California insurance claim help. To that end, it has been reported that the California Department of Insurance had plans to take a closer look at the case.

According to the report, the crux of the denial appears to be a limitation on the policy that excludes coverage for existing medical conditions present within 120 days of making travel arrangements. As part of Butkus’ claim, her cardiologist submitted a statement to the insurance provider that his patient’s shortness of breath could be attributable to heart or kidney trouble, but did not constitute an existing condition as defined by the policy. While diagnosed with high blood pressure in the 1990s and suffering a heart attack in 2003, both conditions have been successfully treated and under control through medication and regular medical care.

Cardiologist Dr. Philip J. Patel is chief of cardiology with Eisenhower Medical Center in Rancho Mirage. In providing his patient with California insurance claim help from a medical perspective, Patel felt satisfied he had answered Allianz’s queries fully and completely.

However, according to the report in the Los Angeles Times, Allianz continued to press, forwarding a new form to Patel that required a simple “yes,” or “no” answer.

“Was the patient symptomatic of or receiving treatment for the primary or underlying conditions” in the four months, or 120 days, prior to booking her trip and taking out the travel insurance policy?

In the absence of a proper forum to more fully explain his patient’s situation, the noted cardiologist felt he had no choice but to respond with “yes.”

That was enough for Allianz to stamp the file “California insurance claim denied.”

“Based on this information from her physician, we determined that the event which caused Ms. Butkus to cancel her trip was due to an existing medical condition,” said Daniel Durazo, a spokesperson for Allianz. In defense of his patient, Patel articulated that in his view the insurance provider had boxed him into a corner.

“Obviously she’s receiving treatment for her underlying condition,” he said. “She’s been receiving treatment for her underlying condition since I started seeing her in 2003.” However, Patel noted that her shortness of breath was a new symptom, and not a representation of an existing condition.

The effort by Allianz to deny the 80-year-old retiree was described in the report as a sleight of hand.

California insurance law requires that insurance policies, regardless of type, are thorough in spelling out what is and isn’t covered together with any exclusions. Provided the claim meets the policy criteria and the policy is in good standing, there is no reason why an insurance claim would be denied. However, as many can attest, the insurance industry appears to embrace the receipt of billions of dollars in monthly premiums, yet stonewalls when it comes to paying out a claim, and the examples of long-term disability denied and similar claims are legion.

Disability coverage is especially important for individuals who suddenly find themselves unable to work for long periods of time - or indefinitely - due to an accident, or through ongoing or one-time health issues. The capacity to remain housed and a family fed can also hinge on the successful conclusion to a long-term disability claim. With a California ERISA-denied claim, a provider thumbs its nose at the various protections guaranteed under ERISA (Employment Retirement Income Security Act, as amended, 1974).

At the end of the day, however, a denied ERISA disability claim can be catastrophic. So too, is the loss of a few hundred dollars to an 80-year-old pensioner. When the denied claim is founded on delay and stonewalling, rather than complete lack of qualification, a call to a bad faith insurance lawyer for some California insurance claim help might be in order.