Sometimes, insurance companies have good reasons for denying workers’ compensation claims—for example, if the injury didn't happen during work or the employee missed the deadline for filing a claim (without a legal excuse). All too often, however, insurers simply don’t want to pay out on claims and look for any reason to reject them. We asked our readers about their experiences with denied claims. Here’s what we learned about the reasons for their denials and what happened when they challenged the insurance companies' decisions.
A denial doesn’t necessarily mean that you won’t receive any workers’ comp benefits. In fact, 47% of our readers who received a workers’ comp settlement or award had received an initial denial of their claims. So if you’ve received a workers’ comp denial, don’t give up hope just yet.
A denial typically means that you’ll have to take extra steps to secure your benefits. Of those who eventually received benefits after a denied claim, 50% had to file paperwork with the state workers’ compensation agency in order to challenge the insurance company’s decision. In some states, workers do this by submitting a written request for a hearing. In other states, workers must file a formal appeal with the state agency. (Learn more about how to appeal a workers' comp denial.)
Whatever the procedure in your state, the process that follows is similar in all states. The injured worker has a chance to informally resolve the dispute with the insurance company (for example, at a mediation or settlement conference). If they don't reach an agreement, the case will generally continue on to a workers' comp hearing. At the hearing, the judge will listen to all of the evidence and make a decision about whether the employee is entitled to benefits.
Most workers with denied claims resolved their cases through settlement talks with the insurance company (82%) rather than at a hearing (18%).
As mentioned above, many workers will need to challenge the denial with the workers’ compensation agency in their state. This often involves filing additional paperwork, attending settlement meetings, and even presenting evidence at a workers’ compensation hearing. Because of this, workers with denied claims usually need the help of an experienced workers’ comp attorney.
The good news is that hiring a lawyer seems to pay off for injured employees. On average, our readers with denied claims eventually received 47% more in benefits when they hired lawyers. Worker with lawyers received an average settlement or award of $18,200, while workers without lawyers received only $12,400. (Learn more about whether workers' comp attorneys are worth the cost.)
We asked our readers what reason the insurance company gave for denying their claims. While workers received a wide range of reasons, some were more common than others. Insurers regularly denied claims for the following reasons:
By far the most common reason for a claim denial was because the injury was supposedly caused by a preexisting condition unrelated to work. For example, the insurance company might think that your injury was caused by the effects of aging or due to an old sports injury. More than a quarter (28%) of our readers received a denial on these grounds.
Having a preexisting condition is not always a bar to receiving workers’ compensation benefits, however. For example, if your doctor says that your preexisting condition had nothing to do with your current work injury, you should still be able to receive the full scope of available workers' comp benefits.
Even if your preexisting condition is related to your work injury, most states will allow you to collect benefits if work aggravated your condition. For example, suppose you injured your shoulder years ago while on vacation. After taking some time off and receiving medical treatment, your condition improved and you were able to return to work. But, after years of lifting boxes at your job, you hurt your shoulder again. In this case, your work injury would likely be covered and you would receive workers' comp benefits for the worsening of your condition. Or, if your shoulder had completely healed, your work-related shoulder injury might be considered a new injury altogether (in which case you wouldn’t be limited to compensation for just the worsening of your condition).
Another common reason for a workers’ comp denial was that the worker failed to meet notice or filing deadlines. Thirteen percent of workers were told that they had waited too long to report their injuries to their employers or to file workers’ comp claims.
Most states have two deadlines that workers must meet. The first is a notice requirement: Workers must notify their employers of their injuries within a certain timeframe. While the deadline varies by state, it is often somewhere between 30 to 90 days. The second is a filing requirement: Workers must typically file an official workers’ comp claim within certain time limits. In many states, the deadline for filing a claim is one or two years from the date of the accident—or if you have an occupational disease, one or two years from the date you were told your condition was work-related.
If you fail to meet these deadlines, you might lose your right to collect benefits. However, in many states, a delay in reporting your injury to your employer may be excusable. For example, if you were incapacitated and couldn’t call or email your employer, the delay might be excused. Or, if your employer already knew about the injury—for example, because a supervisor witnessed your accident—your failure to give proper notice may be excused. The deadlines for filing a workers’ comp claim, however, are usually much stricter. If you miss the filing deadline, the denial of your claim might be permanent.
A small percentage of our readers, 5%, said that they received a denial because the injury happened while they were away from work or off duty. For example, a worker might have been injured while running an errand or commuting to or from work.
Whether your injury truly isn’t covered by workers' comp depends on what you were doing at the time of the injury. Your injury will typically be covered if you were performing work duties or tasks, even if you were offsite at the time of your injury. For example, if you were injured while making an office run to Home Depot to get work supplies, your injury will probably be covered.
A major exception to this rule is the “coming-and-going rule," which says employees aren't covered by workers' comp if they're injured during their regular commute to and from work. However, any travel that’s outside of the employee’s regular commute is often covered. For example, employees will probably receive benefits if they're hurt while traveling between job sites or making a special after-hours visit to the workplace.
The coming-and-going rule also applies to lunch breaks: Workers are generally not covered by workers' comp when going to and from lunch. For example, if you were hurt while walking to lunch at a nearby restaurant (or while eating lunch, for that matter), workers' comp probably won't cover your injury.
Many workers received other explanations for rejected claims. Some, for example, said that the insurance company simply denied that the accident happened at all. Others reported that the insurance company downplayed the seriousness of the injury, saying that it didn’t require medical treatment or time off from work. And a few said that the insurance company didn’t give a legitimate reason for the denial at all. (To learn more, see Common Reasons Workers' Compensation Claims Are Denied.)
