Denial of Disability Coverage from ATV Purchase

[SassyCathy]

Live in Missouri.

On Feb. 18th 2003, husband and I purchased a 4 wheeler. While filling out financial paperwork, the woman at the dealership asked if we wanted disability insurance. I told her I was disabled already, I wouldn't qualify and my husband said he was not interested. She did some calculating and said it would only add about 8.00 to our monthly payment, was he sure he didn't want the added insurance? My husband agreed to take the insurance. There were no medical question's asked, nothing. My husband was working full time at this time.
On March 17th, because of two torn rotator cuff injuries at work, which one had been repaired, my husband collapsed at work with a severe anxiety attack caused by chronic pain. He has never worked again. We had no idea that this was going to happen, and yes, he had been treated for torn rotator cuff, and carpal tunnel, but we were sure that he would improve. He was found disabled by SS in September 2003.
We continued to make timely payment's for a year on the 4 wheeler, until that got to be more than what we could handle, so we filed the paperwork for the disability insurance, and stopped making payment's. A year goes by with us submitting all his medical information, which by this time was over 500 pages. The insurance company finally decided that - they would not cover this, because of *pre exsiting condition's*. I didn't realize this until we recieved a refund check for the amount of the premium for the disability insurance, which was paid by the company we bought the 4 wheeler from, not the insurance company. We never cashed that check. We bought the insurance in good faith, they never asked any medical question's, and we had absolutely no idea that my husband was going to become disabled, there was no sign, besides his pain in his rotator cuff, that would lead us to believe that he would go out of work on a stretcher from Post Traumatic Stress caused by chronic pain.
They have attempted to repo the 4 wheeler 3 time's, and with attorney advise we told them to hit the high road. They have not filed suit, had no legal paper's to repo the 4 wheeler.
I feel that we don't owe them anything since we bought the insurance in good faith, my husband was working full time at the time.
One moment our attorney's say's - let them file against us and we will go to court and win and let them pay all legal fee's. And then I was just asked if we wanted to settle with them for a reduced amount, from our attorney.
So now I don't know what to do. Do we have a leg to stand on to win this if the 4 wheeler company files suit against us?
And I keep wondering why the 4 wheeler company sent us the refund check for the insurance premium, instead of the insurance company.
None of this makes sense to me, and it seem's like they are making up the rule's as they go along, instead of doing what is right.

[Mr. Knowitall]

Your debt for the 4-wheeler is separate from your disability insurance claim. If the disability policy isn't covering payments, you have to pay and the creditor can come after you if you don't pay.

From what you have written, you need to decide between settling with the insurance company or litigating and trying to get the full amount. Your lawyer can advise you as to the pros and cons of each alternative.