Disability Coverage—Don’t Leave Benefits on the Table

I’ve gone through a number of “re-inventions.”

One of my first clients sold extended service contracts for cars. His business grew from 5 to 500 employees. And I became his general counsel.

That job taught me just about everything I know. One of the things I learned about was “breakage.”

Breakage occurs when consumers buy something that gives them a right to future goods or services—but then fail to use it. Chips purchased at a casino but never redeemed for cash are an example.

Breakage is incredibly common in the extended service contract business. (Extended service contacts are like extended warranties but they’re sold (like an insurance policy against breakdown and repair costs) by someone other than the manufacturer.) Almost 50 percent of consumers forget—by the time their car needs repairs—that they have that insurance coverage.

There must also be significant breakage when it comes to disability coverage. It’s not a product of “forgetting.” It’s a product of not knowing it’s there.

My job is to help people recover from at-fault drivers and their own underinsured motorist carriers. Because it’s “adjacent,” I also try to help people figure out if there is insurance coverage available to pay for treatment. But the topic of disability coverage rarely comes up.

This week I was introduced to an attorney who knows all about disability coverage. I thought it would be a good idea to pass on some information she shared.

Please let me know if you have questions. I’m happy to try to answer them or make a referral to an attorney who can.