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Accidental Death and Dismemberment: Pay Up for DUI Death

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By William Peacock, Esq. on June 05, 2013 4:25 PM

Ever wonder why insurance policies include 10,983,267 exclusions and are 3,423 pages long?

This is why.

Richard Johnson had an Accidental Death & Dismemberment policy through his employer. He also had a few too many drinks before his car veered off the highway, through a sign, and flipped multiple times. The cause of death was internal injuries from a motor vehicle accident. The toxicology report measured his BAC at 0.289 percent.

Accidental Death: “Death Due to an Accident” …

Ever throw your dictionary in rage after reading a definition like the one above? The drafter of the insurance policy at issue apparently shared no reservations, as that is the policy’s definition.

This, of course, begs the question: what’s an accident? Fortunately, they didn’t define it as “Acci due to a Dent.” Unfortunately, they neglected to define it at all. They did provide a list of exclusions (suicide, participation in a riot, etc.). That list did not include drunk driving.

The Seat Belt Benefit

His separate employee-paid policy included a “Seat Belt” benefit, which gave you a bonus if you died while wearing a seat belt. That one, of course, did include a drunk-driving limitation.

Basic Contract Interpretation Principles

“ERISA plans, like contracts, are to be construed as a whole.” This means we avoid any interpretation which might make certain provisions superfluous.

What happens if drunk-driving is classified as an accident? That entire “Seat Belt Benefit” limitation becomes superfluous, doesn’t it? There is also the rule of contra proferentum, which means the terms are construed strictly in favor of the insured.

Eckelberry Does Not Control

The facts of Eckelberry are starkly similar. Guy gets drunk, crashes, dies, and the AD&D policy refuses to pay. In that case, the insurer prevailed because the drunk-driving death was not “unexpected” and therefore not accidental.

There is a key distinction between the cases, however. The Eckelberry policy actually defined “accident” as “an unexpected and sudden event which the insured does not foresee.” The language, while vague, imported the concept of “reasonable foreseeability” from tort law. Death is reasonably foreseeable when drunk-driving.

Here, there was no such definition, and by extension, no reasonable foreseeability exclusion.

Drafting Tips

Always reserve discretionary authority to determine benefit eligibility.

When a plan administrator is given such authority, they not only resolve ambiguities (like the definition of accident), but the court is left with an abuse of discretion review. Here, because they failed to reserve such authority, the review was de novo.

When in doubt, define and exclude everything.

They could have defined “accident.” They could have excluded drunk-driving, which is so common that the thought actually did cross their minds (N.B. the “Seat Belt Benefit” exclusion). Though there is a danger in over-defining (“expression of one is to the exclusion of others”), common matters, like DUI deaths, really need to be included.

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