Miami life insurance claims lawyer explains the devastating impact of ERISA loopholes on an accidental death insurance claims in Part 1 of this series.

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

If you lose a spouse or other loved one in a sudden unexpected accident, the grief can be overwhelming.  These emotional challenges can be compounded by the financial hardships associated with the loss of a family breadwinner.  Many families feel they are financially protected in this situation by employer provided life insurance plans – until tragedy takes their loved one.  Companies and associations provide $112.8 billion in life and accidental death policies to their employees and members under ERISA based plans. 

ERISA Loopholes Harm Beneficiaries

However, loopholes in the ERISA law result in insurance companies delaying payment often based on spurious grounds.  When policyholders sue insurers for failure to payout on an ERISA plan, the standard that courts usually apply when evaluating the denial is the “arbitrary and capricious standard.”  Further, policyholders do not have the full benefit of using bad faith claims to motivate insurers to act reasonably in handling a claim under ERISA.  Federal courts require employees to surrender their rights to a jury trial and compensatory and punitive damages if they sue for wrongful denial of a claim.

MetLife Denies Death Is an Accident Despite Autopsy and Police Reports (Jane’s Story)

The outrageous actions of insurance companies that stem from these ERISA loopholes is demonstrated by the case of Jane Peirce who was the subject of a national story by Bloomberg.  Her husband Todd spent nine years fighting a skin cancer in his nasal cavity referred to as “squamous cell carcinoma”.  The treatment was a success, so Todd was cancer free two years after beginning treatment.  During the next eight years, Todd underwent forty surgeries to rebuild his palate and jaw.

Todd later made a spontaneous decision to go hunting with his dad and a friend while at a reunion 350 miles from home.  After the hunting excursion, he drove home on a hot day.  Todd had been on the road for four hours when he lost control of his pickup according to the law enforcement accident report.  His pickup rolled down an embankment and burst into flames.  Both the state medical examiner and sheriff that investigated the crash concluded that Todd’s death was an accident.

Although Todd had a term life insurance policy worth $225,000, Jane did not receive any form of payment under Todd’s accidental death policy.  Instead, Jane was bombarded with letters and phone calls from MetLife despite the conclusions of the medical examiner and sheriff.  She complied with MetLife’s requests to provide the death certificate, state’s accident report, prescription drug records and medical records from twenty doctors. 

Jane understood what was going on, “I was so frustrated.  MetLife was taking and misconstruing information to see if I would give up.”

The insurer eventually notified Jane that they were denying the claim because her husband’s death was a suicide.  MetLife based its conclusion that the death was not accidental on medical records that revealed a toxic level of Tramadol, a pain medication, in Todd’s body when he died.  Jane explained that Todd had a lawful prescription for the medication.  The associate medical examiner also informed the insurer that the elevated drug level was a result of the severe damage that Todd’s body experienced during the collision.  The high levels of the drug test were not the result of ingesting high levels of the medication according to the associate medical examiner.  He expressly informed MetLife that Tramadol was not the cause of death.

The medical and law enforcement evidence supporting the finding that Todd’s death was not the result of a suicide was corroborated by other forms of evidence.  Todd had successfully battled and overcome cancer and a long course of reconstructive surgeries.  He was happy and had no history of depression or mental illness.  He also was deeply religious and held the view that suicide was unacceptable.  Todd often engaged in discussions with his wife after a suicide in their small community about how suicide was an unacceptable solution.

Jane retained an insurance claims attorney who filed an internal appeal with MetLife, which was ignored.  Given that MetLife’s had absolutely no basis for its position, Jane filed a breach of contract claim against MetLife in federal court.  The insurer then quickly settled for the full amount of the policy.  However, Jane did not receive interest for the year she fought for benefits, compensation for attorney fees or other non-contractual damages.  The insurance claims lawyer that represented Jane estimated she would have been awarded $1 million in punitive damages or 5 to 10 times the death benefit if the case had not involved an ERISA claim.

If you are a beneficiary who is struggling to get an insurance company to pay death benefits, we may be able to help.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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