Disability Claims – Illness Versus Accident

Lawyers who handle disability insurance claims know that the policy has to be read.

In a definition of “total disability” in an individual accident and sickness policy or hospital, medical, and dental service corporation subscriber contract, the inability to perform duties may not be based solely on an individual’s inability to perform “any occupational duty,” but the insurer may specify the requirement of the inability of the insured to perform all of the substantial and material duties pertaining to his or her regular occupation, or words of similar import, according to the Texas Administrative Code, Section 3.3012(b)

The policy may further provide coverage for “partial disability,” which is typically defined as the insured’s inability to perform one or more but not all of the essential duties of his or her employment or occupation.

Disability policies normally require that any claimed disability occur while the policy is in effect or within a specified time after any claimed accident or injury.

As an example, the policy may provide coverage for an illness or injury that “totally and continuously disables the insured within 30 days of the date of the accident so as to prevent him from performing each and every duty pertaining to his occupation.”

Disability insurance policies usually distinguish between disabilities caused by illness and those resulting from accidental injury.

As discussed in the 1978, Beaumont Court of Appeals opinion styled, Lone Star Life Insurance Co. v. Griffin, a policy provided that the insurer would pay the insured “1,000 per month for 60 months for an accidental injury resulting in total disability and that it would pay $1,000 per month for 24 months for total disability resulting from sickness.

As in the above example, a shorter period of benefits is usually provided for disability based on sickness, while longer benefits are payable for disabilities resulting from accidental injury.  The reason for this distinction is that far fewer disabilities result from accidents than from illness, so greater benefits can be provided.

The Texas Administrative Code includes provisions relating to disability insurance as promulgated by the Texas Department of Insurance.

According to the Administrative Code, Section3.3040(e), the policy may provide for reduction of disability benefits if the insured is not employed at the time disability commences or is not employed away from his or her place of residence.

And Administrative Code, Section 3.3059, says the policy may contain provisions relating to recurrent disability, but such a provision may not specify that the disabilities be separated by a period greater than six months.