Many insurance policies are sold on the premise that purchasing the policy will remove all stress from the insured’s future. Unfortunately, insurance sellers are not as forthcoming about the possibility of the insurer denying a claim as they are about the supposed benefits of buying the policy.
Insurance companies are required by Texas law to provide an internal appeal process for any claim that is denied. If the internal appeal is unsuccessful, Texas law gives the insured the right to bring a lawsuit against the insurance company to challenge the decision that resulted in the denial of the claim.
The internal appeal process
If an insurer rejects a claim for coverage under a health or disability insurance policy, the insured has the right to commence an appeal through the plan’s internal appeal process. The exact process for commencing and pursuing an appeal is set forth in the policy. The policy should be reviewed in detail as soon as the insured decides to make a claim.
The policy and any other document relevant to the claim – for example, an opinion letter from a health care giver – should be assembled and reviewed by the insured as soon as possible. The exact appeal process should be spelled out in the relevant policy provisions. The insured is responsible for completing the appeal notice and related forms as required by the policy provisions.
The policy will specify a deadline by which the appeal must be submitted. Most policies set a deadline of 180 days from receipt of the notice of denial. The insured may submit any additional information that is believed to be relevant to the claim. Some policies permit a multi-step appeal process, while others limit an appeal to a one-time presentation to the designated appeal board within the insurance company.
Legal action
If the internal appeal is finally denied by the company, the insured has the right to commence a lawsuit in the Texas district court in which the insured resides.
