Relief from forfeiture is an equitable legal remedy that can help insureds when they lose their insurance benefits and/or coverage due to imperfect adherence to the terms of their policy.

What is Forfeiture?

While the concept of “relief from forfeiture” is a common phrase in the area of insurance law, very rarely do people ask what forfeiture itself is and in order to understand the concept of relief from forfeiture, you first need to understand that concept.

Generally speaking, the word “forfeiture” refers to the loss of something as a penalty for doing something wrong or failing to do something you should have done. In the insurance context, forfeiture occurs when an insurance company denies a claim based on specific policy provisions which were not met by the insured. In denied long-term disability claims, this often involves situations where the insured fails to comply with policy requirements such as:

• Filing their claim late: Insurance policies have strict timelines under which an insured needs to file their claim for benefits under a policy.
• Not providing proper documentation: Insurers often require medical records, evidence of wage loss and other documents to support a claim for long-term disability benefits.
• Failing to comply with the terms of the insurance policy: Insurance policies often have requirements about the treatment and medical evaluations an insured needs to attend to maintain coverage under a policy.

If you fail to meet the requirements under your insurance policy your claim can be forfeited. Forfeiture does not mean that your insurance company does not agree that you meet the definition of disability under your policy, just that your failure to meet the conditions of your insurance policy means that you lose your right to your long-term disability benefits you would otherwise be entitled to.

What is Relief From Forfeiture?

Relief from forfeiture is an equitable remedy that can allow insureds to recover rights lost due to a forfeiture. This remedy is used to ensure that harsh consequences do not flow from minor infractions, particularly when the insured has acted in good faith. When a Court will grant relief from forfeiture is dependent on the situation, as it is a discretionary remedy, however the most common considerations when looking at relief from forfeiture are:

• the conduct of the insured
• the gravity of the insured’s breach of the policy
• the disparity between the value of the property forfeited and the damage caused by the breach
• whether or not there is any prejudice to the insurer
• public policy considerations

When long-term disability claims are denied based on an insured’s failure to meet their obligations under the policy due to imperfect compliance with the policy language, relief from forfeiture can help save what would otherwise be a legitimate long-term disability claim. However, just because you made a mistake or failed to meet a deadline does not mean that relief from forfeiture will automatically apply to your situation. Every case is different and whether or not the equitable remedy of relief from forfeiture will apply to your case will depend on a number of factors and require the insight of an experienced insurance denial lawyer.

Experienced Long-Term Disability Denial Lawyers

The best practice is to make sure you are familiar with the terms of your insurance policy and make sure you meet the requirements you need to ensure you do not forfeit your insurance coverage and lose out on benefits you are rightfully entitled to. However, if you do end up having your long-term disability benefits denied or cut off due to imperfect compliance with your policy language, there is hope for relief from forfeiture.

If you have a claim for long-term disability benefits which has been denied because you failed to meet a requirement of your policy but still meet the definition of disabled, contact the lawyers at Taylor & Blair LLP today to schedule a free consultation.