What Is a Life Insurance Post-Claims Underwriting Investigation?

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

Miami and Florida Life Insurance Post-Claims Underwriting 

When a loved one with a life insurance policy passes away, the last thing beneficiaries in mourning need is a dispute with the insurance company. If a life insurance policy has been in effect for less than two years, however, the insurance company will likely do everything possible to delay and deny life insurance claims.

As a result, beneficiaries may find themselves in an unexpected battle with the insurance company instead of receiving the funds that are legally deserved because of an insurer’s post-claims underwriting investigation.

What Is a Post-Claims Underwriting Investigation?

As the name implies, a post-claims underwriting investigation occurs after a claim has been filed. Once a beneficiary files the claim, only then will the insurance company procure relevant information and make an underwriting decision.

For reference, underwriting refers to the insurance issuing process when someone applies for insurance. Namely, underwriting is the process by which the insurance company’s underwriter approves coverage, denies it or decides to provide coverage at a higher than standard rate.

Factors like the applicant’s health, background and other pertinent information are considered before a final underwriting decision is made. Ordinarily, the underwriting process is completed before the insured’s policy is issued and takes effect, not after a claim is filed.

Why Would an Insurance Company Conduct a Post-Claims Underwriting Investigation?

The reason some insurance companies will rely on post-claims underwriting is because the company may already suspect or even know that an adverse medical history or misrepresentation exists that may justify the denial of coverage in the event a claim is filed.

The insurance company will then pore over every detail post-claim, looking for reasons within the application that justify a claim denial and policy cancellation. This practice can often lead an insured policyholder to believe they are securely insured, all while the insurance company may have reason to believe otherwise.

Is Post-Claims Underwriting Legal?

It is a fact that insurance companies are relying on good Florida law as their justification for searching the insured’s application. Section 627.409 of The Florida Statutes allows the insurer to deny claims or cancel a policy if the insured’s application misrepresents a fact that was material to the insurance company’s risk. However, the insurance company may still be acting in bad faith if they know or should know that adverse medical history could be used to deny a claim.

Rule 690-157.109 of the Florida Administrative Code expressly prohibits post-claims underwriting. All applications for a long-term care insurance policy must contain clear and unambiguous questions capable of effectively ascertaining the applicant’s health condition.

In spite of this rule and Florida’s prohibitions against post-claim underwriting, some insurance companies have still been caught trying to conduct post-claims underwriting in bad faith. In such cases, a lawsuit may be warranted. Courts have ruled against insurance companies found to be conducting post-claim underwriting in bad faith, as evidenced by Mora v. Tower Hill Prime Ins. Co., Case No. 2D13-4125 (Fla. 2d DCA Jan. 23, 2015).

Although this 2015 case was based on property and not a life insurance dispute, the insurance company attempted to rely on the same Section 627.409 material risk defense asserted in many life insurance disputes. Even so, the court held that the insurance company was conducting post-claim investigations while straining to find application issues that would justify a claim denial.

Talk to a Miami Life Insurance Attorney

Florida rules against post-claims underwriting and recent case law reveal that the insurance company’s view of your claim and coverage are far from final. A claim that is denied may be based on post-claims underwriting or bad faith.

A Miami life insurance lawyer will help you protect your claim and legal rights against bad faith, unscrupulous practices on the part of an insurer.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].



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