This is Part 3 of 3 in a series of posts addressing basic issues related to Long-term Care (“LTC”) insurance coverage. Part 1 provided background information regarding these unique and important policies. Part 2 addressed commonly disputed terms and conditions. This final part discusses what is known as insurer “bad faith.”
As mentioned in Part 1, in most situations insurers’ claims determinations are made in good faith, even where insureds may not agree with the determinations. That said, the law recognizes that, in some situations, insurers’ conduct constitutes “bad faith.”
State law differs with regard to the availability of a remedy for bad faith conduct, and what constitutes bad faith conduct. It has been defined as, “conduct designed to mislead or deceive” or failure to “fulfill some duty or contractual obligation” not because of an “honest mistake.” A claim determination is is not in bad faith where it is wrong but “fairly debatable.” Put another way, “Bad faith is not simply bad judgment or negligence…but a conscious wrongdoing because of dishonest purpose.”
Obviously, any situation that involves taking advantage of an elderly or infirm insured can create concerns about bad faith.
Claim determinations that are based on outlandish and factually unsupported interpretations can constitute bad faith, as well. For instance, there could be bad faith where an insurer ignores submitted documentation regarding the insured’s medical condition and his or her inability to perform activities of daily living (ADLs), or the credentials of a facility or provider.
The first step in considering bad faith is fully understanding the long-term care insurance policy you paid for and the process to which you are entitled. Not all delays, or limitations or denials of coverage constitute bad faith, and an experienced attorney can help guide insureds through the long-term care claim process in a way that provides the most direct and fastest route to obtaining policy benefits.
This content is provided as background and does not constitute legal advice. The attorneys at our firm have many years of experience with long term care insurance coverage issues. For more information or to schedule a free consultation, contact us at info@lalorattorneys.com / 646.818.9870.
Recent Comments