Exclusion Clause Defined - Insurance Company Has Burden Of Proof
An exclusion clause is a common provision in nearly all disability insurance policies. Disability insurance companies use exclusion clauses to avoid payment of disability insurance benefits when the specific condition(s) are met.
What most people do not know is that the disability insurance company has the burden of proving that the exclusion applies. Examples of these types of provisions are an intoxication exclusion and a pre-existing condition exclusion.
Under the intoxication exclusion, any disability or loss caused by, resulting from or related to an accident, injury or illness caused by, resulting from, or related to the voluntary influence of any drug, narcotic, intoxicant or chemical would be excluded.
Under the pre-existing condition exclusion clause benefits will not be paid for a total disability that is caused by, or contributed to by, or resulting from a pre-existing condition. This is unless the insured has been actively working for one full day following the end of the twelve consecutive months from the date he/she became insured. Additionally, the pre-existing condition had to actually exist during a certain period of time prior to the the date the person became covered under the insurance. Most disability insurance policies use the three months just before the insurance coverage started.
When it comes to filing a disability insurance claim, the person who is disabled has the burden of proving that a medical condition prevents him or her from working. However, when it comes to denying disability insurance benefits based on an exclusion clause, the insurance company must prove that the exclusion actually applies. This is to your benefit.
The courts have been clear in ruling that the insurance company bears the burden of proving the exclusion provision applies. The insurance company cannot deny your claim based on the fact that you failed to provide proof that your total disability was not the result of a pre-existing condition. It also cannot be denied for failure to show that you were not intoxicated at the time of the disabling injury or sickness. In other words, if the disability insurance company wants to exclude payment based on an exclusion, they have to prove it.
If you feel your claim has been improperly denied based on the application of an exclusion clause, contact Dabdoub Law Firm for an evaluation of your case. Our experienced disability insurance attorneys have helped many people who were denied disability insurance benefits based on an exclusion in the disability policy.