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When an insurance denial is flat-out wrong

Insurance contracts are complicated. Some may be hundreds of pages long, and contain numerous definitions and pages of exceptions or exclusions. Many insurance companies are very large entities, with thousands of employees in dozens of locations across the nation and the world.

This can lead to problems. Even when the issue seems narrowly defined and straightforward, the overall complexity of the process and their internal systems can lead to unfair denials and fights that stretch on for years, as policyholders battle the companies that are supposed to be helping them with their claims.

Part of the problem is the industrial production line-like operation of many of these companies. Their claims are processed by the tens of thousands, with much of the work being done by contractors or entry-level positions.

To these workers, much of this material may be as undecipherable to them as it is to those filing the claims. They simply move the claim down the line to the next position. There is little understanding or comprehension. There may be little communication. The process is optimized to move as many claims through the system as possible.

If a mistake occurs or if something is entered wrong, the process of correcting that error may be long and arduous. In the case of a woman from Salt Lake City, a lab had submitted a blood test with the wrong code. The claim was denied and she fought with them for years.

When she pointed out to the company that her denial listed the two issues she had that required the test, the company then noted that she was beyond the 180-day limit on a claim and there were no exceptions.

She brought her complaint to a local TV station, which with the threat of bad publicity for their Kafkaesque refusals, quickly allowed the insurance company to solve her problem and authorize the payment of her claim.

Because insurance companies do make mistakes and even engage in bad faith denials, you may have to resort to extraordinary steps, such as speaking with the media or contacting an attorney, to obtain compensation for your claim.

Source:, "Battling an unjust insurance denial," Michelle Poe and Matt Gephardt Friday, May 13th 2016

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