Most people believe the process of applying for, obtaining, and keeping disability benefits is fair. Many insureds call DCS and tell us, “I thought if I was honest and upfront about my claim, nothing would happen.” Although most insureds themselves are honest, disability insurers are not. All insurers have deliberate internal strategies in place specifically designed to deny claims that should be paid. Surveillance is one of the “risk management” activities insurers use to discredit claims and even the claimants themselves.
ARGUMENTS FOR SURVEILLANCE
Playing the devil’s advocate for a moment, disability insurers have the right to investigate claims to make sure the activities of the insureds are of a level described by insureds and their physicians. Approximately 15% of claims made per year are in fact fraudulent. In this economy that percentage is probably much higher. People DO make claims for secondary gain and disability insurers have a financial responsibility to their stockholders to pay only legitimate claims. Therefore, surveillance has been traditionally used by all insurance companies as a “risk management” strategy to “catch insureds” unawares and discredit their claim. Surveillance is not going to go away. Even though disability insurers are now abusing the recordings they obtain, surveillance is a successful means of identifying fraudulent claims.
COST AND OPPORTUNITY
Insureds we speak to generally communicate what we call “old wive’s tales” about surveillance. In general, there is not an insurance private eye around every bush, and if there is, they don’t stay long. Quite a few insureds tell us, “Unum has been conducting surveillance on me for a month!” Or, another client might say, “My claim was denied several months ago and I’m sure The Hartford is still watching me.” Due to the frequency of comments such as this let’s take a look at a few accurate facts about surveillance.
- Insurance companies do not conduct surveillance on claimants when it does not have liability for the claim. To put it another way, if the insurance company isn’t paying your claim, it won’t lay out the money to conduct surveillance to get you off claim. Make sense? This eliminates claims for initial applications, and claims which have already been denied. Disability insurers aren’t stupid; in general, they will not put out any money for surveillance when there is no liability to pay a claim.
- On those occasions when the insurance company does conduct surveillance the duration is usually three days, usually Thursday, Friday and Saturday. If an IME has been requested, the insurer may order a “tag” surveillance conducted the day before, the day of, and the day ofter the evaluation. A surveillance rarely lasts for more than three days although the insurer can conduct surveillance more than once.
- A three-day surveillance generally costs $1,500 sometimes less if the agency has a standard contract with the insurance company.
- Surveillance representatives are employed by the insurance company, may or may not have a PI license, and are NOT attorneys.
- Surveillance teams generally watch your residence from a street or hidden drive near your home. They must obtain permission to watch you from a neighbor’s property, but frequently do not if they can get away with it. Although insurance surveillance teams are supposed to check in with the local police, they frequently do not.
INVASION OF PRIVACY
There is nothing worse than being on claim and also having privacy invaded. Reactions to surveillance from insureds is varied from initial fear to uncontrollable anger and sense of betrayal. No one likes to be spied upon. “Why do they think I’m faking?”, one client told me in tears. “I feel so betrayed and angry my insurer would do this to me and my family.” Another client told us Unum’s PI followed her into her physician’s waiting room, and another reported numerous trespassing into his exercise gym where the PI recorded him working out according to doctor’s direction. Unum’s investigators followed a California insured down lover’s lane and his claim was denied for “dating”. Insurance surveillance investigators will follow claimants anywhere if they can, and the sense of personal invasion of privacy is often unbearable.
Although most insureds interpret surveillance as a personal invasion of privacy suggestive of making an accusation of dishonesty, in reality surveillance shouldn’t be taken personally. I know the implication of the act IS on a personal level, the “intent” of surveillance is once again to eliminate a financial reserve and a realization of profit. Disability insurers do not DO anything unless there is a profit motive. Surveillance is simply one of many risk management strategies designed for the purpose of making terminations of claims look credible. If an insured can be caught engaging in physical or mental activity beyond his/her medical restrictions and limitations, from the insurance perspective – all the better.
We know it’s very hard NOT to take surveillance personally. It hurts to be accused of dishonesty and it angers most insureds to think the disability claims process allows such acts. But, it does. And, as long as an insured is being paid a benefit from a disability insurer, surveillance is a possibility. All insureds will be forced to deal with this at some point while on claim.
DCS has strategies in place with our clients to deal with surveillance when it happens. Those who are covered by employer-sponsored ERISA polices as well as those who purchase their own DI policies are going to be subjected to surveillance. Knowing in advance how to identify surveillance, and what to do about it encourages insureds to remain in control. As one client described her feelings after being prepared by DCS, “I’m glad I don’t have to feel like a sitting duck anymore – I can just make them go away.”
Bottom line – surveillance is going to be one of those things which is unpredictable, uncertain, and probable when receiving benefits from any insurance company. And, although the invasions of privacy are hard to deal with, acceptance of surveillance as part of the claims process helps. It also helps to be prepared to recognize surveillance when you see it, and know what to do about it. As hard as it might be, remember insurance surveillance is not aimed at you personally, but it’s purpose is definitely to eliminate your claim. It is far better to be informed and smart about surveillance than hurt and angry.