Chiropractor is awarded $7.6 million in disability insurance denial case.
In July 1997, Dr. Joan Hangarter, a California chiropractor, suffered a severe injury that prevented her from performing the spinal manipulations required of her profession. She filed a claim with Paul Revere, her disability insurer, who approved the claim and agreed to pay her $8,100 per month. But Paul Revere was soon taken over by Provident, which later merged with Unum. In 1999, Provident reviewed Hangarter’s claim and terminated her benefits, causing her to lose her home and go on welfare. She sued the insurer, and after a three-week trial, was awarded past and future benefits as well as $5 million in punitive damages. The court found that the company had improperly denied benefits and acted with “oppression, fraud or malice”.
Court rules against Aetna in $120 million insurance bad faith lawsuit.
In 2001, a jury awarded $4.5 million for medical expenses and $116 million in punitive damages to the widow of David Goodrich, a deceased stomach cancer patient. The country’s largest for-profit HMO was sued by Goodrich’s widow, Theresa, for denying him coverage for cancer treatment that may have prolonged his survival. Aetna was found guilty of placing its own financial interests before the needs of a policyholder.
Disability insurance denial verdict awards $36.7 million to eye surgeon.
In 2001, Dr. John Tedesco, a successful eye surgeon, purchased insurance from UnumProvident to compensate him for lost income if he became disabled. Dr. Tedesco had paid the premiums on his policy for six years when he developed tremors that made it dangerous for him to continue to perform eye surgery. In response to Dr. Tedesco’s disability claim, UnumProvident sent checks for four months before it sent Tedesco a letter terminating his benefits and denying his claim. Even when Tedesco was later diagnosed with Parkinson’s disease, the insurer continued to insist that he was not disabled. Tedesco sued the company and was awarded $36.7 million dollars by a jury.
Princeton Co. agrees to pay $20 million in insurance bad faith case.
In 2001, a road worker in Philadelphia, PA was left a quadriplegic after being hit by a drunk driver that had just left a tavern insured by Princeton Insurance Co. Although a jury awarded the injured man $75 million at the time of the crash, it was never paid due to the tavern having an insufficient policy limit of only $1 million. Princeton was sued for bad faith, accused of failing to negotiate a settlement within the policy's limits after the initial verdict. To settle the insurance bad faith lawsuit, the company agreed to pay $20 million to the claimant.
Horace Mann settles class-action insurance bad faith suit for $5 million.
In July 2001, Illinois-based insurer Horace Mann settled a class-action suit that was filed against the company by holders of various disability policies. The $5 million settlement was based on confusing language in the policy's offsetting benefits provisions. Offset provisions affect the policies of people who have other forms of income to protect against disability, such as retirement benefits, social security, and added insurance policies.
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