HIV not disclosed in California but still won case. Why?

Have you ever been frustrated by insurance claim denials in California due to undisclosed pre-existing conditions? You’re not alone—many face similar issues, but knowing the law helps. This article explores a landmark court ruling to guide you through resolving such disputes. Read on to learn how the Galanty v. Paul Revere case can aid you in challenging unfair denials.

Situation

Situation Example

In sunny California, there was a person named Mark. Mark had a job, friends, and a pretty normal life. One day, Mark decided to be responsible and buy an insurance policy from the Paul Revere Life Insurance Company. This was a disability insurance policy, meaning it would help him if he ever got too sick to work. Before getting the policy, Mark once had a health test and found out he was HIV positive. But at that time, he wasn’t sick or anything. He just knew he had the virus. Years passed, and sadly, Mark got very sick with AIDS, which is something that can happen if someone has HIV for a long time.

When Mark got sick, he couldn’t work anymore. So, he went to the insurance company and said, “Hey, I need help because I can’t work.” At first, the company said, “Sure, we’ll help you.” But then, they changed their mind and said, “Wait a minute! You had HIV before you got this policy, so we won’t help you after all!” Mark was confused and upset. He remembered something called the “incontestability clause” in his insurance policy. This clause said that after two years, the company couldn’t deny his claim because of something that happened before he got the insurance, unless it was specifically mentioned in the policy. Since his disability happened after more than two years, Mark thought he should still get the benefits.

Judgment

The court decided in favor of Mark, the plaintiff. It ruled that the insurance company could not deny him benefits for the pre-existing condition of HIV/AIDS because the policy’s incontestability period had passed. The court referenced the case number S073678 and found that the insurance company’s denial was not justified under California Insurance Code §10350.2.

Solution

Immediate Steps to Take

If you find yourself in a situation like Mark, the first thing to do is to gather all your insurance documents. Look for the incontestability clause in your policy. This is your first line of defense. It’s also important to stay calm and keep records of all communications with your insurance company. Write down the dates and what was discussed every time you talk to them. This can be very helpful if you need to challenge their decision later.

Filing a Claim and Court Procedures

When you are ready to file a claim, be thorough. Fill out all the necessary forms and provide any medical records that support your claim. It’s crucial to meet all deadlines and follow the instructions carefully. If your claim is denied, you have the option to appeal the decision. You might consider hiring a lawyer who specializes in insurance cases. They can help you understand the legal terms and make a strong case. If you choose to go to court, your lawyer will guide you through the process and represent you in front of a judge.

Negotiation and Settlement Strategies

Sometimes, settling out of court is a good option. This can save time and legal fees. Before going to court, try to negotiate with your insurance company. You might propose a settlement where both sides agree on a compromise. This is where having a lawyer can be really helpful, as they can negotiate on your behalf. If negotiations fail, then taking legal action might be your best bet.

FAQ

What is Incontestability?

Incontestability is a special rule in insurance policies. It says that after your policy has been active for a certain time, usually two years, the insurance company can’t argue about whether your policy is valid because of something that happened before you got the insurance. This rule protects you from having your claims denied for conditions that weren’t mentioned in the policy.

How Does the Incontestability Clause Work?

This clause works by stopping the insurance company from denying claims based on conditions you had before you got the insurance, as long as these conditions aren’t specifically named in the policy. After two years, the company can’t use these old conditions as a reason to not pay you.

Who Benefits from This Clause?

This clause helps people who have had their insurance policy for more than two years. It’s especially helpful when filing claims for conditions that were not clearly excluded in their policy. It gives policyholders peace of mind, knowing that after a certain time, their insurance is more secure.

What Happens If Fraud is Detected?

If the insurance company finds out that fraud has occurred within the two-year contestable period, they can cancel the policy. However, after two years, if they find something that seems like fraud, it usually isn’t enough to cancel the policy unless it’s very serious.

Can the Insurer Deny Claims After Two Years?

Generally, after two years, the insurance company can’t deny claims for conditions that existed before the policy was issued unless those conditions were specifically excluded by name. This gives more security to the policyholder.

Do the Timing and Diagnosis Matter?

Yes, timing can be important. If a condition shows up after the policy is issued and isn’t excluded, then the insurer typically can’t deny coverage after the two-year incontestability period. The diagnosis timing can affect how the claim is handled.

Why Does the Incontestability Clause Exist?

This clause is there to protect policyholders from having their claims denied because of minor mistakes or things they didn’t know about when they got the insurance. It encourages people to feel confident when buying insurance, knowing that their policy will remain in force after two years.

How Long Does the Incontestability Period Last?

The incontestability period usually lasts for two years from the date the insurance policy is issued. After this period, the clause is fully effective, preventing certain claim denials.

What If the Clause is Violated?

If an insurance company violates the incontestability clause, the policyholder may have the right to challenge the denial in court. This can potentially lead to the denial being overturned and the claim being paid.

What Legal Options Are Available?

Policyholders can pursue legal action through litigation if their claim is denied in violation of the incontestability clause. This may result in the insurance company reversing the denial and providing the benefits owed.