Disability Policy Coverage Issues

Insurance lawyers who handle disability cases need to know these coverage issues.

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.  This is seen in the 1978, Beaumont Court of Appeals opinion, Lone Star Life Ins. Co. v. Griffin.  In this case the 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 shown in the Lone Star case above, it is not unusual for disability policies to provide a shorter period of time for disability claims based on sickness.  On the other  hand, there are usually longer periods of time payable on disabilities resulting from accidental injury.  The reason for the differences between payouts on disability claims related to illness and those related to accidents is that far fewer disabilities result from accidents than from illness.  Thus. greater benefits can be provided.

An important place to look for regulations that are put out by the Texas Department of Insurance related to disability insurance is the Texas Administrative Code.  These regulations are found in 28 Texas Administrative Code, Section 3.3040(e) where exceptions are listed related to a person being employed when the person becomes disabled.  Also Section 3.3059, discussing recurrent disability issues is important to lots of people.