Intoxication Exclusion for Accidental Death and Dismemberment Insurance
Your employer gives you employee benefits to recruit and retain you. When you receive these benefits, you count on them when necessary. You may qualify for accidental death and dismemberment (AD&D) insurance if you suffer a dismembering injury or lose a loved one. However, the insurance company and the cold realities of a law called ERISA can stand in the way of the benefits you need.
The insurance company plays a pivotal role in every ERISA claim. Unfortunately, even though the law intended to protect employee benefits, lawmakers certainly did not write it in your favor. Insurance companies get to play the role of judge and jury for your claim, and their initial determination can significantly complicate things when you get to court.
One thing you can do to even the playing field and protect your rights is to immediately consult with an ERISA AD&D claims attorney. The right lawyer can review your policy and identify any possible exclusions or obstacles. If an insurance company has already denied your claim, your lawyer can start building your appeal as soon as possible.
Insurance Companies Work Against You to Save Money
The problem is that the insurance company is financially motivated to deny your claim, and they have an inherent conflict of interest that permeates practically everything they do. If they approve your claim, they must pay you from their accounts, which is the last thing they want to do. Insurance companies will take every measure in their power to avoid paying you.
You are not the insurance company’s client, and they do not care about your personal situation. They are only concerned with their profit statement, and it is nothing to them to deny a claim and force you to fight.
They make ERISA claims and the appeal process particularly difficult, long, and complicated for claimants. When an insurer denies your AD&D claim, however, it is not the end of the road. Getting the right legal representation is the first step to protecting your rights under ERISA and your insurance policy.
Your AD&D Policy Is a Contract
The insurance company is legally responsible for covering what they promised in the terms of the policy. When there is an accidental death and dismemberment policy through the job, it serves as a contract between the policyholder and the insurance company.
If what happened to you falls within the policy’s definitions and coverage and does not fall within an exclusion, you are entitled to payment. They must pay the family when the policyholder dies or suffers a covered accident.
For purposes of an AD&D policy, a covered injury can include:
- The loss of a limb
- Paralysis
- Blindness
Insurance Companies Get to Write Policy Exclusions
Like every other type of insurance, an AD&D policy will also come with exclusions. The insurance company gets to define the conditions under which it will pay a claim and exclude certain types of accidents from coverage. Presumably, fewer exclusions can mean that your company needs to pay higher premiums for the policy.
The insurance company does not want to pay claims when they believe the accident victim did something wrong that led to the incident. In their view, it is not considered an accident under the terms of the policy.
Examples of AD&D Policy Exclusions
With this in mind, the insurance company includes a series of exclusions in the policy that limit what they must cover.
AD&D policy exclusions include:
- The death was not accidental insofar as the decedent had an illness or a pre-existing condition
- The person committed suicide, or someone else murdered them
- The person’s negligence caused the accident
- Medical care or medication caused the death or injury
Intoxication Is a Common Exclusion From AD&D Policies
Another critical exclusion in the policy is when the accident victim was intoxicated or under the influence at the time of the accident. For example, if the policyholder died in a car accident when they were drunk, the insurance company may decline to pay the benefit.
Even though ERISA governs AD&D policies provided through a job, the state law governs the actual contract. Many states allow insurance companies to include exclusions for intoxication, and from a policy perspective, it makes sense.
However, from a practical standpoint, insurance companies may abuse their power and wrongfully deny families the benefits they deserve.
Insurance Companies Can Do Many Things Wrong When Denying Your Claim
Insurance companies can take advantage of existing language ambiguities or misrepresent a situation as an excuse to deny your claim. The insurance company may take advantage of its power during a difficult time for your family. They count on the fact that you may give up on your claim because you do not wish to challenge them. Sometimes, you must fight back to get the benefits you deserve.
Nearly all policies will have some type of intoxication exclusion. Some insurance companies draft language excluding any injury a person suffers when intoxicated. Thus, intoxication can bar you from receiving benefits, no matter the circumstances.
Some Courts Even Allow Insurance Companies to Rely on an Intoxication Exclusion When it Does Not Exist
Even if there is no policy exclusion about intoxication, the insurance company may still deny benefits. Some courts have held that a drunk driving death is not considered an accident within the policy language. These courts have explained that an accident is not “reasonably foreseeable,” but an automobile-related incident involving an intoxicated driver is considered foreseeable.
However, other courts have held that insurance companies cannot deny benefits without an explicit exclusion that addresses intoxication. In one crucial 1990 case, an appeals court held that the central question for coverage for reckless conduct is whether the insured subjectively expected to die or suffer serious bodily injury from their conduct. If the court cannot determine the person’s actual expectations, then the question is:
Whether a reasonable person, with background and characteristics similar to the insured, would have viewed the resulting injury or death as substantially certain to result from the insured’s conduct.
For example, in one case, an appeals court overturned the insurance company’s denial of benefits when the decedent had a 0.203 blood alcohol level, stating that death was not reasonable or foreseeable.
Different Legal Standards May Apply to Intoxication
Whether the court applies the “reasonably foreseeable” or “substantially certain” standard depends on the circumstances of the case and the language of the individual policy. From the insurance company’s standpoint, denying a claim with an explicit exclusion for intoxication is easier.
Still, there are numerous gray areas that the insurance company wades into when it denies a claim based on intoxication. For example, the person may have died or sustained injuries, but the intoxication did not contribute to what happened.
Alternatively, someone may have died from an accidental overdose, and even though they meet the definition of intoxication, an insurance company can not blame them for what happened.
How Courts May Address Ambiguous Exclusion Language
Another question is whether death or dismemberment falls within the language of the exclusion. The actual language can be ambiguous based on how the insurance company drafted the policy.
A court must use principles of contract interpretation to reach its own conclusion about what the document says. If the language is not clear, the court may even interpret any ambiguity against the insurance company because they drafted the policy.
ERISA Governs How You Fight a Claim Denial
When a job provides an AD&D policy, a federal law called ERISA regulates it. Unfortunately, you cannot simply sue the insurance company for breach of contract when they wrongfully fail to pay the required benefits.
In addition, you cannot sue the insurance company themselves for their conduct in denying your claim. What you must do is go through a complicated legal process to get the money that you deserve.
While ERISA makes the legal process difficult, it is the only way to successfully fight the insurance company and get the benefits your policy entitles you to.
Hire an Attorney Immediately After an Insurance Company Denies Your Claim
The first thing you should do if the insurance company refuses to pay benefits is to hire an experienced ERISA attorney. It is extremely difficult, if not impossible, to beat the insurance company on your own. Insurance companies will fight cases for years, especially when they do not want courts setting a legal precedent that will hurt them.
The insurance company will show you no respect on your own. In ERISA cases, they only understand one language, and, unfortunately, that is litigation. When you hire a tough and experienced lawyer, the insurance company knows to expect a fight—and might just back down.
How to Appeal a Denied AD&D Claim
ERISA dictates how you can appeal when the insurance company denies your claim. The insurance company must tell you the reason why they will not pay the claim, cite the exclusion in the policy, and explain the basis of their denial.
The appeals process that you need to follow depends on whether you are seeking benefits for an accidental dismemberment or death. The Department of Labor issued an advisory opinion that stated that the appellant must follow standard ERISA claims procedure for dismemberment cases because they may receive benefits in the future. The standard ERISA appeals process does not apply for an accidental death because the benefits are a one-time payment.
If your claim involves dismemberment, you must first appeal to the insurance company and go through their process. ERISA does not allow you to take your case straight to federal court. Even though there is little chance that the insurance company will reverse their denial on appeal, you still need to go through their process before going to the federal district court.
If your claim involves death, you can go directly to federal court once the insurance company denies your claim. Your lawyer can communicate with the insurance company first and provide them with any additional information to consider. They may respond with additional support for their position so you can better understand their arguments.
The Insurance Company May Get Some Deference from the Court
Here, even though the court will generally give some discretion to the plan administrator benefits determination, it will provide less discretion regarding their findings of fact. This distinction is critical in cases when the plan administrator has determined that the accident victim was intoxicated.
Courts have held that “substantial evidence” must back the plan administrator’s findings of fact. Thus, if you have evidence showing that the plan administrator did not correctly find facts, the court may consider the administrator’s findings with less deference than their conclusions about what the policy said.
As you can see, these are highly complex legal principles and standards, making the right legal representation necessary.
It Will Cost You Nothing Upfront to Hire an ERISA Lawyer
Even if money is an issue when you have lost a loved one or suffered a severe injury, it should not prevent you from getting the legal help you need. An ERISA attorney works for you on a contingency basis, and they do not ask you for a retainer or send you hourly bills.
If you do not win your case, you will not need to pay your attorney anything, no matter how much time they have invested along the way. You only have to pay your attorney if you receive compensation from your case, so you do not have financial risk when hiring a lawyer.
Your more considerable risk comes from not taking strong action against the insurance company and allowing them to get away with wrongfully denying your claim. Seek a consultation with an ERISA attorney immediately.
Following graduation from Loyola Law School in New Orleans in 1990, Price McNamara served as a Federal Judicial Law Clerk to the Honorable John M Shaw, Chief Judge, United States District Court Western District of Louisiana.
Mr. McNamara founded J. Price McNamara ERISA Insurance Claim Attorney, and began putting his past experience to work for the injured and disabled clients he now represents against the insurance companies in personal injury and long term disability and other insurance disputes in both federal and state courts