California seniors often purchase long-term care insurance expecting their insurers to honor policy terms. However, many face long-term care insurance denial or reduced in-home care hours precisely when they need help most. When this happens, seniors have an impossible choice: drain their life savings for care or go without essential activities of daily living (ADLs) assistance.
This predatory practice is both a breach of contract and a violation of the covenant of good faith, and in serious cases elder financial abuse. At Brennan Law, we specialize in protecting California senior rights and holding insurance companies accountable for the compensation they owe. If you suspect your LTC insurer has acted in bad faith, we can help you pursue declaratory relief, your policyholder rights, and punitive damages.
Red flags your LTC insurer is acting in bad faith
Recognizing bad faith tactics is the first step toward protecting your rights. Common red flags from your LTC insurer include:
- Ignoring physician ADL certifications: The insurer disregards a doctor’s professional assessment that the policyholder is unable to perform a certain number of activities of daily living (ADLs), which are the standard reasons for benefits.
- Failure to investigate: The company does not conduct a thorough or timely investigation into your claim, or it ignores evidence that supports your need for care.
- Unpaid caregiver invoices: Despite providing documented care, your insurer refuses to pay invoices, leaving caregivers uncompensated.
- Policy term misinterpretation: An insurer deliberately misrepresents or misinterprets the language of your policy to deny or limit benefits.
- Delay tactics: The insurer uses excessive delay tactics, such as repeatedly requesting unnecessary documentation, to frustrate the claims process and encourage you to give up.
- Pattern & practice: The company’s behavior is part of a larger, systemic pattern of unfairly denying or delaying claims to protect its bottom line.
Every insurance contract in California carries an implied covenant of good faith and fair dealing. That means an insurer must not act in a way that undermines the insured’s right to receive policy benefits.
California has unfair claims practices statutes and regulatory rules that define how insurers handle claims. To succeed in a bad faith claim, the policyholder generally must show:
- The policy exists and covers the claim (i.e. benefits are owed).
- The insurer unreasonably delayed, denied, or underpaid the claim.
- Because of that, the insured suffered harm.
Unlike some claims, you often do not need to show malice or fraud to prove bad faith; unreasonable conduct (lack of reasonable basis) is sufficient.
What to do — Steps, evidence & legal remedies
Under the Elder and Dependent Adult Civil Protection Act (EADACPA) (Welfare & Institutions Code § 15600 et seq.), a wrongful denial of LTC benefits may be financial abuse when it deprives an elder of property or benefits, especially if done knowingly or with negligence of likely harm.
Some wrongful LTC denial qualifies as both an insurance issue and elder financial abuse. For example, if an insurer denies benefits after knowing an elder meets their policy requirements, that might violate the duty of good faith and elder abuse laws.
Because LTC abuse cases are difficult to prove, it’s important to create a paper trail that can later be used as evidence.
- Immediately document ADLs and doctor prescriptions.
- Include detailed records of your condition, abilities, and medical recommendations for care.
- Keep caregiver logs showing services provided, costs incurred, how services address your needs, and correspondence with your insurer.
Next, submit a formal appeal and complaint to create a record of your dispute. This includes:
- An internal appeal in writing to your insurance company, clearly stating why you believe the denial or reduction is a mistake.
- Request claim file to show the insurer you are serious and to access their internal notes and records. (You have a right to your complete claim file.)
- A California DOI complaint with the California Department of Insurance.
If your insurer continues to violate your rights, you can file suit for breach & bad faith. But you don’t have to do it alone. At Brennan Law, we fight to recover your policy benefits and pursue additional damages, including attorney fees and punitive damages. Contact us today for a free confidential consultation.