William Shernoff says he has been bringing lawsuits over canceled health insurance policies since the 1980s. Lately, however, that part of the Southern California plaintiff lawyer’s practice has exploded: Last year, Shernoff filed about 70 lawsuits for people who have gotten stuck with hefty medical bills when an insurance company revoked their coverage by claiming they falsified or omitted important details on their applications. He’s on pace to file about the same number this year.
So far, Shernoff says, litigation over the insurance companies’ practice — often referred to as post-claims underwriting — hasn’t led to any significant case law. He said most cases end with dismissals or confidential settlements, adding that the settlements can be substantial, a point disputed by lawyers for insurers.
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