Insurance Claims Increasingly Fought in Court

by Mark Friedman  on Monday, Nov. 11, 2013 12:00 am  

Chris Hampton’s career as a tractor-trailer driver ended suddenly in November 2010 when he was diagnosed with diabetes. But more bad news came his way when his insurance carrier denied his claim for long-term disability.

In 2012, Hampton sued Reliance Standard Life Insurance Co. of Philadelphia for breach of contract. His case highlights what is becoming a growing trend of people or companies being forced to take their insurance carriers to court after their claims are denied.

“I actually think [my insurance carrier] thought I was going to give up, like I’m just not going to pursue it,” Hampton, 42, of Stuttgart told Arkansas Business last week. “I was like, ‘I can’t drive anymore.’”

U.S. District Court records show that in the Arkansas federal courts in 2011 there were 93 lawsuits related to insurance claims. In 2012, the number rose to 99. And through Oct. 31, 77 lawsuits involving insurance claims have been filed.

Some of those cases, however, include insurance companies suing their policyholders first to receive an order from a judge that says they don’t have to provide coverage.

But most of the cases involve a policyholder suing the carrier.

In July, Hampton won his case in U.S. District Court in Pine Bluff against Reliance for breach of contract and received a judgment of $56,700. But in August, Reliance announced it was appealing the case to the 8th U.S. Circuit Court of Appeals.

Attorney Brandon Cate of Springdale, who is representing Reliance, declined to comment because the case is on appeal.

The Blame Game

The insurance industry blames the rise of lawsuits on plaintiff’s attorneys who think insurance companies are easy targets because of their assets, “deep pockets,” in other words.

The plaintiff’s attorneys, though, put the blame on the insurance companies. Plaintiff’s attorneys said the companies do everything they can to delay and deny their policyholders’ claims.

“It’s as tough an environment as I’ve seen in almost 30 years of practice,” said Whitney Buchanan, an attorney who handles insurance and injury claims for plaintiffs in New Mexico. “You really have to fight these guys tooth and nail if you want to get paid fairly.”



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