You make an insurance claim in Oregon. The company reviews it, gathers information, and then denies it based upon some misstatement in your application. Can the insurance company do that? Maybe. Maybe not.
Oregon's insurance law is not well developed. The Oregon State Insurance Division recently issued a bulletin on this topic to insurers as to what it considers proper and improper.
First, Oregon's Insurance Division does not want insurance companies to intimidate people who apply for benefits. Insurance companies should not insert big warnings about fraud or misstatements in claim forms unless it included such warnings in the application for insurance.
Next, if the insurance company wants to cancel the contract, then the misstatement must be serious: either fraudulent or "material to the interests of the insurer." In other words, something minor and not meant to sucker the insurance company should not be the basis to cancel the insurance contract once you need the benefits for which you paid.
Even for simple denials of claims, the insurer should prove that the misstatement or concealment was either intentional or that the insurance company would not have issued the policy if you had filled out the application fully and accurately.
For life insurance and health insurance policies, the companies only have two years in which to contest coverage based upon misstatements in the application. For health insurance, the two-year limitation does not apply to those who procured insurance through fraud.
In addition to the above position of Oregon's Insurance Division, Oregonians also have some common law rights. For example, every contract includes an implied covenant of good faith and fair dealing. If the insurance company is not acting in good faith, that is another basis on which to fight it.
Insurance Companies entice you with happy geckos and daffy clerks. Giddily, they collect your premiums. They become devious and difficult when you actually want them to pay for a serious claim. That's when you need the help of an attorney who knows the tricks they play and whether the insurer's actions are within the bounds of the law.
Jeff Merrick, Oregon Trial Attorney
Injury & Employment Law
503-665-4234
The above is not legal advice. I cannot give you sound advice without knowing more information. It is intended to raise some issues for you to discuss with your own lawyer.
