Each year, thousands of people sign up for new life insurance policies. They do this, in large part, because they want financial security for their families in the event the unthinkable happens. Many new policy holders are young professionals. They know that they are unlikely to die from a disease anytime soon. Nonetheless, we all know that accidents can strike at any time.
Consequently, many of these people sign up for Accidental Death and Dismemberment (AD&D) riders In addition to their regular life insurance policies. As the name suggests, these riders kick in only if the policyholder dies in an accident. The thing that makes these riders so attractive to policyholders is that the death payout tends to be three to four times the normal policy payout.
Thus, for example, if a policyholder with a $100,000 life insurance policy dies in an accident, his beneficiary would receive the $100,000 payout, plus an additional $300,000 for the AD&D rider. As you can imagine, life insurance companies do not love paying out on AD&D claims. In fact, they will often go to great lengths to avoid such payments.
One of their favored tactics is to claim that an accidental death was not an accident at all. As lawyers who specialize in the wrongful denial of life insurance claims, we have seen life insurance companies do this even when all police reports and all witnesses verify that the policyholder’s death was, in fact, an accident.
To illustrate, here are a few of the most egregious examples we’ve seen of a life insurance company claiming an accident was not an accident at all. In each of the below examples, the policyholder had an AD&D rider in place that the life insurance company was trying to avoid.
The car accident
Charlie was a young accountant with a wife and two kids. One evening, after a particularly long day at work, Charlie headed home on a Southern California freeway. Traffic was unusually heavy for that time of night.
As Charlie approached his freeway exit, a semi-truck headed in the opposite direction crossed the median. Although it was not in danger of hitting Charlie’s car, which was in the furthest right-hand lane, it did strike several other cars. They then careened toward Charlie. In an effort to avoid the collision, he pulled hard to the right, which caused his car to veer off a 20-foot drop-off. Charlie was killed instantly when the car hit the roadway below.
The scene was fully captured by a freeway surveillance camera. Police reports, which included reference to the surveillance video, indicated that the entire incident was an accident. The police specifically ruled that Charlie's death was accidental.
Nonetheless, when Charlie's wife tried to make a claim against his life insurance policy and the AD&D rider, the AD&D portion of her claim was denied. The insurance company claimed that because Charlie veered off the road without being hit by another vehicle, he intended to commit suicide.
Charlie's wife hired an attorney specializing in the wrongful denial of life insurance claims. This claim denial was thereafter overturned in its entirety.
The ski incident
Karen had been skiing her entire life. One winter, she was enjoying the slopes at a local resort when another skier lost control and headed straight at Karen. Although Karen tried to avoid a collision, the two skiers crashed at top speed. Karen was rushed to a nearby hospital where she recounted the details of the incident for police. Shortly thereafter, she slipped into a coma from which she never awoke.
Karen's husband, Bill, filed a claim against her life insurance policy and AD&D rider. Along with his claim, he submitted police reports concerning the incident that concluded the two skiers collided by accident. This time, the insurance company denied the AD&D portion of the claim because they found the other skier had intentionally run into Karen. They made this conclusion despite the fact that the police had interviewed the other skier and had absolved her of any intentional wrongdoing.
Bill also retained an attorney specializing in the wrongful denial of life insurance claims. The attorney had to file suit on bill's behalf in federal court. After a full trial, which included testimony from the other skier, as well as witnesses to the incident, the court ruled in Bill’s favor. He was awarded the full policy benefit, plus interest.
The home repair incident
Jack and his wife Lucy were new homeowners. As young professionals, their first home was a fixer upper. In fact, the home ended up needing more repairs then the two of them ever envisioned. Hiring professionals to make all those repairs soon became too expensive for the couple. Jack decided he could teach himself to make several of the repairs by researching relevant techniques on the Internet. Notwithstanding how many repairs the couple had to perform, their friends and family knew how excited they were about the new house and the life they were building there.
One day, however, Jack made a fatal mistake. He tried to perform an electrical repair without turning off all power to the house. As he went to unscrew a faulty plug, he was electrocuted and killed instantly. Lucy made a claim for benefits against Jack’s life insurance policy and AD&D writer. As you might suspect, the insurer denied the AD&D portion of the claim on the basis that Jack likely committed suicide.
Lucy's lawyer contested the claim denial by using the insurance company’s internal appeals process. To prove how unlikely it was that Jack committed suicide, he submitted evidence regarding all the future plans he and Lucy had together. He also submitted copies of airline tickets the couple had purchased for a future trip to Ireland – a trip Jack had dreamed of his whole life. The lawyer also pointed out the complete absence of evidence that Jack intended to harm himself. Eventually, he convinced the insurer to overturn the AD&D claim denial.
These are just 3 of a million examples of wrongful denials of valid AD&E claims. If you are facing such a denial, please call our office today. We're here to help.