Countering an Insurance Denial for a Lapsed Policy

Oftentimes — in Florida and elsewhere — insurers will deny otherwise legitimate claims due to the coverage having lapsed.  Insurance coverage will lapse when the claimant has failed to make a premium payment before the applicable due date.  This applies to all types of insurance coverage, from disability insurance to health insurance to property insurance, and more.  If the coverage lapsed before the events giving rise to the claim (i.e., an accident that renders you disabled), then you may not be entitled to receive benefits under the policy at issue.

It’s important to note, however, that there are a number of tools that give claimants “extra” time to make a premium payment before coverage lapses.  Further, insurers have certain duties that they must adhere to — failure to do so may lead to a determination that the coverage has not actually lapsed.

Consider the following counter-arguments to an insurance denial that is justified on the basis of a lapsed policy.

Grace Period Still Applicable

Your insurance policy grace period covers you in the event that you fail to make a premium payment on time.  Though every insurance plan is different (and that applies to grace periods, too), generally speaking, grace periods will last for roughly two to three months after the missed payment.  If you fail to pay for your outstanding premiums before the grace period finishes, then the policy will be deemed “lapsed” at the time of the original missed payment.

For example, suppose that you miss your March 1 payment for your disability insurance coverage.  You allow the three month grace period to pass (on June 1), then your coverage will have effectively lapsed on March 1.  If you were disabled in April, you would not be entitled to receive benefits.

Payments Were Actually Made

Insurers must keep a proper account of all premium payments made by their claimants.  Of course, in some cases, there may be some administrative or procedural error that leads to your payment having “slipped through the cracks,” so to speak.  If you are certain that you made your premium payment on time, you’ll want to consult with a qualified attorney who can investigate the facts more thoroughly — it may be that the insurer has failed to keep their accounts properly updated, and the issue is born of a misunderstanding.

Inadequate or Improper Notification of Lapse

In Florida, as in other states, there are laws requiring that insurers serve proper notice of an impending lapse in coverage.  This typically involves mailing the notice to the claimants primary and secondary address.  If you can show that the insurer did not mail you proper notice of an impending lapse in coverage, or if the insurer mailed the notice to the wrong addresses, then you can avoid the lapse altogether.

Speak to an Experienced Miami Insurance Litigation Lawyer for Additional Guidance

If you have had your insurance claim denied on the basis of a policy lapse, then you may be able to challenge the adverse determination of the insurer and potentially even pursue litigation to obtain damages.  Policy lapse is a common justification for denial, and the implication is that the claimant did not live up to their contractual duties — in reality, however, the insurer must also satisfy their legal duties when it comes to notifying claimants of a policy lapse, and keeping adequate records of payment.

Here at Ver Ploeg & Marino, P.A., we have over two decades of experience advocating on behalf of insurance claimants, from disability claimants to health insurance claimants, in a variety of disputes.  We are well-equipped to respond to adverse strategies employed by insurance companies, including denials that involve policy lapses.  All too often in the insurance dispute context, claimants fail to recognize that the insurer has failed to perform their duties under the law.  We are deeply committed to our clients and their interests — throughout the dispute process, we keep our clients informed about their rights and their ability to secure the benefits that they are owed pursuant to the policy at issue.

Call (305) 577-3996 or submit a case evaluation form on our website today to get connected to an experienced Miami insurance litigation lawyer at Ver Ploeg & Marino, P.A.  Consultation is free and confidential.

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