Denied Insurance Claims
WHAT IS VEXATIOUS REFUSAL TO PAY?
The Missouri vexatious refusal to pay statute is a consumer protection law that is designed to prohibit abusive insurance practices. The law applies to what are known as first-party insurance contracts. That is to say, the law only covers claims made against your own insurance. The vexatious refusal to pay statute does not apply to claims made against someone else’s insurance (i.e., third-party insurance claims). Abusive practices involving third-party insurance must be redressed through a common law bad faith claim.
WHAT PROTECTIONS DOES THE MISSOURI VEXATIOUS REFUSAL TO PAY STATUTE PROVIDE?
The Missouri vexatious refusal to pay statute protects policy holders from an unreasonable denial of a claim or an unreasonable refusal to pay the full value of a claim. The vexatious refusal to pay statute applies to the following types of insurance policies, among others:
- Uninsured motorist coverage
- Medical payments coverage (sometimes referred to as MedPay)
- Underinsured motorist coverage
- Life insurance
- Health insurance
- Accidental death and dismemberment insurance
- Homeowner’s insurance
- Long-term care insurance
- Fire, Cyclone and Lightning insurance
- Burglar, theft, and embezzlement insurance
COMMON SITUATIONS THAT MAY TRIGGER THE VEXATIOUS REFUSAL TO PAY STATUTE
Though Missouri law is clear that insurance companies are not permitted to unreasonably deny claims, insurance companies routinely violate the law. Below is a list of just some of the situations that may trigger a vexatious refusal to pay lawsuit:
- Denying a claim based on a contention that an insurance policy has been cancelled for non-payment, when the required notice of the cancellation where not provided;
- Refusing to pay a health, disability, or long-term care insurance based on an unreasonable demand for paperwork from a health care provider;
- Denying a phantom motorist claim when no proper investigation was conducted;
- Undervaluing an uninsured motorist claim based on an inappropriate valuation of pain and suffering or attributing fault in the accident to the policy holder; or
- Writing down the medical costs incurred by the policy holder as “unreasonable” based on computer programs or survey information that do not take into account the specific situation of the policy holder.
HOW CAN AN INSURANCE LAW ATTORNEY HELP?
The Missouri vexatious refusal to pay statute permits consumers to file suit to recover (1) the reasonable value of their claim, and (2) a penalty in the amount of 20% of the first $1,500 of the value of the claim and 10% of the value of the claim over $1,500. Additionally, the law permits policy holders to recover the attorney fees they incurred in pursuing a lawsuit. The attorneys of Lear Werts LLP are experienced in insurance law cases and offer free consultations to individuals who believe that they may have been subjected to an unreasonable denial of an insurance claim.
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