What Kanye West’s $10M lawsuit teaches everyone about insurance

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What Kanye West’s $10M lawsuit teaches everyone about insurance

Insurance is a real snoozefest, so unless some big name is literally covering their butt, you won’t find the industry mentioned in your daily celebrity news roundup. Leave it to Kanye West to buck the trend.

Per a lawsuit obtained by The Hollywood Reporter, Yeezy (Yeezus? Ye? Pablo? … sorry, I’m an xennial) is suing insurer Lloyd’s of London and its syndicates for refusing to pay close to $10 million in claims related to his canceled Saint Pablo tour.

Kanye West’s insurance problems

A quick explainer for anyone who doesn’t pay attention to Kanye West: Back in November, after delivering a few bizarre rants on stage about Donald Trump, Hillary Clinton, Beyonce, Jay-Z, and Mark Zuckerberg, the rapper abruptly ended two concerts and, subsequently, the remainder of his Saint Pablo tour due to an unspecified medical condition. He went on to spend eight days at UCLA’s Resnick Neuropsychiatric Hospital.

West’s company Very Good Touring, Inc. reportedly had an insurance policy to protect against financial losses from concerts canceled due to illness or injury. According to various reports, West’s lawsuit alleges Very Good Touring, Inc. filed a claim two days after West checked into the hospital, but have yet to be paid. Furthermore, the suit alleges, steps the insurance companies has taken since then suggests it’s trying to deny the claim. Those steps allegedly include requesting an immediate independent medical exam, interviews with third-parties, moves to negotiate the amount of the claim, and suggestions the rapper’s condition was caused by smoking marijuana.

A spokesperson for Lloyd's of London told PolicyGenius it could not comment on the specifics of the case.

“The market will always take steps to find a solution amicable to both clients and insurers where there are disagreements through discussion and mediation,” the spokesperson wrote in an email. “However, where an agreement cannot be reached, valid claims can only be paid on syndicates being satisfied that they have the information required to make any payment.”

Insurance lessons from Kanye West

Most people don’t need insurance to cover a worldwide tour, but there are a few good lessons in here for anyone with comprehensive coverage. For starters, insurers can investigate and ultimately deny your claim.

That’s true even when it comes to life insurance, which is actually the most straightforward of policies. Generally speaking, if there’s a death certificate, the beneficiary gets paid. However, there are instances where your claim is rendered null and void. One involves cases of suicide. The other involves what’s known as a “contestability period”. During the first two years your policy is in effect, an insurer can investigate a claim. And, if they discover you lied during underwriting — say, for instance, you told them you didn’t smoke marijuana when, in fact, you do — they could claw back the amount of your death benefit or, in a worst-case scenario, deny the claim.

That doesn’t mean the takeaway here is that insurers can just deny claims willy-nilly. But it does mean:

  1. You’ll want to disclose everything (even something that could drive up your premium) to your insurer up front, so you (or a beneficiary) don’t run into problems when filing a claim.
  2. It’s uber-important to read the terms and conditions of any policy you’re considering, so you’re aware of any clauses that can complicate a claim and instruct your beneficiary accordingly. For instance, with renters insurance, it’s important to know the specific events and types of damage covered. Our Geniuses can actually help you better understand your life insurance quotes and policy options here.

What to do if your insurance claim is denied

Most insurance policies — whether we’re talking car insurance, homeowners insurances, health insurance or business insurance — have an appeals process in place.

Before you file an appeal, however, make sure you have all the information you need. If your insurer denies your claim or elects to pay less than expected, ask for a detailed reason why. Assemble additional documentation supporting your claim. That includes pictures of any damage or, if we’re talking any type of property insurance, an independent appraisal of the item in question.

If your appeal is denied, you’re otherwise not getting anywhere, and you truly believe the insurance company is wrong to not pay, you can contact the Department of Financial Services in your state to file a complaint. You can pull a Yeezy and hire an attorney. Or maybe first ask for a free consult. That way, the lawyer can determine whether you have any legal options or a chance of winning your case before you proceed.

Image: Pieter-Jannick Dijkstra