AboutRichard Expertise I have been the no-fault insurance administrator and arbitration specialist for 18 years working for a plaintiffs` law firm. I have a copy of and am familiar with the newest Reg.68 of the New York State insurance law and have sucessfully represented over 300 applicants at hearings and have guided more than 1,500 more that didn`t need to actually go to a hearing.
Question QUESTION: My friend's husband took out a policy for $25,000 in June 2008 and gave them a check, They told him that he was covered at that time. He died on July 1, 2008 and when his wife called them on 7-1-08. They said they would get back to her. They then told her that her husband's policy was cancelled on July 1, 2008 so he was not covered & then sent her a letter in the mail. It was not until later that they returned the moeny he had paid into his account. Please help in this matter. Thanks - Jill Smith
ANSWER: Hi Jill, a lot of this would depend upon whether or not your friend has a copy of the insurance policy with the declaration sheet in it showing the date it actually went into effect. If she does then she should write a letter to them via certified mail registered return requested and demand that they honor the claim with the threat of legal action if they do not. If they do not honor the claim then by all means she should retain the services of a competent Attorney and sue them. I need to know the reason for the cancellation and also the cause of your friend's husband's untimely death. Are they saying that the check had not cleared yet? Are they saying that a decision had not been reached regarding his eligibility? There had to be some other reason for the insurance company to cancel the policy other than the fact that they merely did not want to pay out on the claim. Please let me know.
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QUESTION: She found the letter & it says he was denied due to medical history. Never got a policy. When they took his money (check cleared) they said it would go to underwriting & that they would honor it until the money was returned. Money not returned until week after death. She does not have the autopsy back yet. Preliminary cause pulmonary embolism. She called recently to ask why denied & was told by Larry that he was not allowed to know. When she spoke with the girl there, she told her that only the Mgr. was allowed to know the reason denied. Larry is the mgr!
It all sounds very strange to me. She has contacted an attorney to check into this.
Thanks for all of your help. I really appreciate it & just want her to be able to collect the insurance, if she is entitled to it.
Answer Hi again Jill, I am glad that your friend contacted an Attorney. Ordinarily I would say that given the new set of circumstances you have given me there was never an actual insurance policy written. When the underwriting people looked at the deceased's medical history to determine his eligibility and the premium rate for the policy they must have decided not to insure him. What I do not understand is why they would ask for money up front and tell him that he was covered upon their receipt of the check. This is not how insurance works. They first go to their underwriting staff with all of the medical history and then make their determination as to whether to issue a policy based on the information. It is at that time that a printed insurance policy is given to the insured and the initial payment is made. The problem that the Attorney will run up against is that there is nothing in writing at this juncture except for the denial and the cancelled check or proof of payment and subsequent return of the funds. I am sure that the Attorney realizes that he will have to try this case because without a written policy with an effective date of coverage he only has the oral communications between a deceased person and an insurance agent and I doubt that the insurance company will cave in and honor the claim. They would also most likely appeal any verdict against them if in fact the case was to be proven. This will be a somewhat long and expensive matter to adjudicate. I wish your friend all of the luck in the world. The old adage "nothing ventured, nothing gained" applies.
