Contributed by Disability Insurance Bad Faith Attorney, Eric Ratinoff

We’ve spent quite a bit of time now in this series talking about disability insurance claims, what the insurance policy is about,  what the insurance company’s duties are and how to put your best foot forward when making a claim.  But what does it mean to be totally disabled under an insurance policy?

Well, most private insurance policies that have been sold in the last 20 years have two major provisions.  One is a total disability provision involving “own occupation,” and then there is a conversion to “any occupation.”

Let’s talk about “own occupation.”  Most insurance policies will state that in the first 24 months of disability, if a person is unable to do the substantial and material duties of their own occupation, that’s total disability.  Now, an “own occupation” policy is a kind that I talked about in an earlier post where insurance companies were selling these policies in the 1970’s through the early 1990’s, and they were policies that never converted.  They were pure “own occupation” policies all the way to age 65 sometime and beyond.  That meant that if you were unable to do the substantial and material duties of your own occupation, then even if you began another career, you would still collect the full benefits of your policy.  Most policies that are sold now contain a provision stating that after 24 months of disability from  being unable to do the material and substantial duties of your own occupation, the policy will convert to “any occupation.”  This means if you are able to do the substantial and material duties of any occupation, your benefits will be reduced based on the level of income you are able to produce in any occupation you choose.

Now, the insurance policy doesn’t tell you what the courts have interpreted “any occupation” to mean here in California.

“Any occupation” does not mean that if you used to work as a technician in a lab that you can now become a ticket taker at your local movie theatre or a greeter at Walmart.  That’s not what “any occupation” is.  In order to understand what the meaning of “any occupation” is in California, you have to look to the case law.

What the case law tells us is that you must consider what the substantial and material duties are for the policyholder’s occupation.  What that means is what is necessary to the prosecution of an occupation in the usual and customary way.  Now what it also means is that you also have to be able to do a job with reasonable continuity.  You can’t be considered as able to work if you can only work a couple hours here and a couple hours there.  If you could work eight hours a day, but in two hour increments throughout a 20 hour period with naps in between.  That’s not realistic, and that’s not reasonable continuity.  So you must be able to work with reasonable continuity in your own or another occupation.

The next important point is that an occupation would have to be in your own field, or another occupation in which you could reasonably be expected to engage in.   It has to be another occupation that you can do with reasonable continuity,  that you could reasonably be expected to perform satisfactorily in light of certain very specific things that have been recognized and ruled on by the California courts.  Your age, your station in life, your education, your training, your experience, your physical and mental capacity are all the type of criteria that determines whether the so called “any occupation” component of the disability policy applies to you.

Again, using the example of the ticket taker, if you had worked in a lab before, if you were a court reporter, or if you were a lawyer, if you were a veterinarian, or if you were a vet tech — you can’t be expected, having done that type of work, to then have to become a ticket taker or a greeter at Walmart.  It’s not the way the law works in California and it’s not what you purchased when you purchased your disability insurance, and you paid those premiums over all these years.  You bought protection.  You bought piece of mind, and your insurance company owes it to you to hold up their end of the bargain.  You have held up your end, so don’t let the insurance company get away without holding up their end of the bargain. They are holding to the promises that they made to you and your family.

To download this series via Podcast, visit the KCRLegal Personal Injury Podcast!


Contributed by Disability Insurance Bad Faith Attorney, Eric Ratinoff

So you’ve become disabled.  You’ve paid premiums all these years. You’ve done everything you’re supposed to do. You made your claim, you provided documentation and information to the insurance company. You filled out their forms, you gave them permission to get your medical records, including permission to talk with your doctor, if they want to.

Now what does your insurance company have the obligation to do?

First and foremost, they have the obligation to promptly and thoroughly investigate your claim. That doesn’t mean just look at what’s convenient for them. They have to affirmatively look at the records and get any records that they don’t have that they think may support your claim. And that’s an important point – an insurance company in California cannot just look at information that supports their position that you’re not disabled or that there isn’t coverage in your policy. Every insurance company in California has an affirmative obligation to seek out evidence of coverage, not simply seek out evidence that helps them deny coverage.

Insurance policy holders have a very important right to hold their insurance company to the standard that they have to put policy holders’ interests on at least a high a standing as they put their own. And that’s a powerful tool.  Insurance companies have to investigate, and they have to do it quickly. They have to pay you timely. They have to seek out information that supports your claim. And they have to communicate.

Insurance companies are not allowed to be dishonest with you. They are not allowed to tell you that there’s no coverage when in fact there is. They are not allowed to undercut your claim because it’s convenient or profitable for them.

In so much of the world and the way that we see big business doing business, companies put profits over people. An insurance company, in handling your claim, absolutely is not allowed to put profits over you. It’s people over profits. They have got to do their job, and they’ve got to do it well. They’ve got to do it quickly. And they have to seek out information that supports you.

Let’s talk about the medical review doctor for the insurance company. This is somebody who earns his or her living from the insurance company that makes money by collecting insurance premiums but not paying claims. So this doctor will look at the records and say, “gee whiz, I disagree with the treating doctor,” the one who’s treated the insurance policy holder for 15 years, who knows the record inside out, who’s visited with the patient many many times over the years. He’s actually drawn the blood and had the conversations and done the physical examinations and all the work that doctors do when they’re doctors who treat people and understand people and know their patients. But the insurance company has someone there in house on their payroll who will look at the records and say, “well, I disagree with the doctor who actually knows what he’s talking about.”

There’s no misunderstanding why that happens. The question is what do we do about it? And what’s an insurance company’s obligation? It’s certainly to do more than that.

Now, has that doctor gotten on the phone with the treating doctor? Has he inquired about what the doctor wrote in his records about the patient? They don’t do that, but they certainly should if they’re going to disagree with that doctor.

And why doesn’t the insurance company doctor perform a physical exam? If there’s additional testing that needs to be done, why not get that done? They have an affirmative obligation to do it if they’re going to deny a claim. Where there’s medical support, they can’t simply disregard your good medical evidence. It doesn’t work that way in a private disability insurance policy in the state of California.

If your insurance company’s playing those kinds of games, you don’t have to put up with that. Get somebody – an attorney or another representative – to step forward and help you make your best case.

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Contributed by California Insurance Bad Faith Attorney, Eric Ratinoff

Insurance companies routinely roll out new marketing strategies to make their services more appealing to certain high income segments of society.  Too often, these strategies prove to be heavy on marketing and light on value.

One such example lies in disability insurance policies as marketed to doctors, especially physicians practicing in California.

In the 1980’s and early 1990’s, “own-occupation” insurance policies seemed to be the most effective at achieving solid total disability coverage for the medical profession.  At that time, all insurance carriers who offered own-occupation disability policies maintained their policies under the same working outline, and defined total disability as being unable to perform the “substantial and material duties” of one’s regular occupation while under the care of a physician.  The definition made it clear that if the doctor could not do his job, he would be entitled to full benefits.  The “regular occupation” referred to the one he was engaged in at the time of the disability, meaning the doctor could pursue a different profession and his benefits would not change.  Additionally, if being under regular doctor’s care would not improve the policyholder’s condition, most companies would waive the “under care of a physician” requirement.

However, due to lack in regulation of individual long term disability insurance terms, many carriers have since modified their policies (or eliminated own-occupation policies altogether), creating in essence their own definitions of the term.  Now we have a situation where what may be a good own-occupation policy with one carrier is essentially an entirely different policy disguised as an own-occupation policy with another carrier. Some of the policies now marketed as own-occupation policies are actually income replacement contracts (or “loss of earnings” policies), as they have inserted a clause restricting the physician’s ability to pursue any other occupation while receiving the total disability benefits awarded due to their inability to engage in their primary profession.

Other insurance carriers have begun marketing a new type of policy named “Medical Occupation.”  These policies redefine the occupation of a physician as encompassing a variety of duties, and they define total disability as being unable to perform all of those duties.  They base the policyholder’s benefit on a percentage of what job functions they regularly fulfilled prior to the disability, and what percentage they are able to fulfill after the disability.  This means if the physician chose to continue working in some capacity after the disability, this would decrease or possibly eliminate his benefits.

One major insurance company that discontinued their own-occupation policies in the late 1990’s has re-entered the market with the new medical occupation model.  They are now heavily marketing these policies to physicians.

Insurance companies across the board routinely attempt to reduce or eliminate benefits in order to cut costs and increase profits.  For physicians who purchased own-occupation policies in the 1980’s and 1990’s, however, this has resulted in numerous unpaid and under-paid insurance claims.  Fortunately, the law in these cases typically favors the insured.

Physicians should choose wisely when shopping for a long term disability insurance policy.  Certainly there are some specialties that may not require a pure own-occupation policy.  But surgeons, obstetricians, ophthalmologists, urologists and others who would greatly benefit from pure own-occupation policies should double check their existing policies, and thoroughly review any new proposals prior to signing the dotted line.

When seeking a pure own-occupation disability policy, look for words like “any other occupation” or “gainful occupation.”  Keep in mind that there may also be time limits implemented, i.e. the policy may be written so that the pure own-occupation benefits exist only for the first 5 years, with restrictions taking place thereafter.  If you see these or similar terms, do some comparison shopping.  There are still a few carriers who offer pure own-occupation policies.  As always, reading the fine print is critical with insurance policies to make sure you are getting the appropriate value in exchange for the high price of your premium.