As lawyers who have specialized in the wrongful denial of life insurance claims for many years, we’ve learned a thing or two about the way life insurance companies operate. One thing we can say with certainty is that if a life insurance company believes it has any reason at all for denying a claim – no matter how legally unsound that reasoning may be – it will do so.
Here’s why: Life insurance companies are for-profit businesses that have one goal and one goal only – making money. The more valid claims an insurer can deny, the more money it makes each year. Thus, for some insurance companies, their tactic is to deny just about every claim that comes through the door, even if it is valid. They do this knowing that most life insurance beneficiaries, many of whom are already suffering from grief and depression, will simply accept the claim denial decision and walk away from the large payout that is owed to them.
Of course, insurance companies plan for this by drafting vague policy language that will give them the greatest leeway in issuing claim denials. In fact, we see the same policy provisions invoked time and time again by some of the more unscrupulous insurance companies out there.
One of those provisions is known as the “inherently dangerous activity exclusion.” Basically, this provision allows an insurance company to deny coverage if the insured dies while engaging in an “inherently dangerous activity.” Some of the more legitimate insurance companies will define the meaning of that term so it is clear to policyholders. For those companies, things like skydiving, motorcycle racing, or bungee jumping are activities deemed inherently dangerous.
Other companies, however, will leave the term undefined. Then, when a policyholder dies doing something that might be considered even slightly dangerous, the company will invoke the exclusion and deny coverage. This article explores one such case.
A sad, but not unusual, cause of death
The case involved a man in his late 30s named Jim. Jim was an attorney with a large firm. His firm provided generous employment benefits, including a life insurance policy. Jim opted for a policy with a $1,000,000 payout and named his wife Brenda as the sole beneficiary.
A few years after his policy issued, Jim was driving home from work late at night. In fact, he had worked twenty-seven hours over the course of two days and he was physically exhausted. He called Brenda at 10:30pm to tell her he was starting the 35 minute commute home.
About half way home, a deer ran onto the freeway right in front of Jim’s car. Though Jim slammed on the brakes, he hit the deer and his car spun out of control. The car broke through the guardrail and careened down a steep hillside. Jim was killed instantly.
Given that the crash resulted in a death, the police conducted a full investigation. It revealed the following: (1) Jim was not under the influence of any drugs or alcohol when the accident occurred; (2) Jim’s cell phone was tucked away in his briefcase in the back seat of the car, suggesting that Jim had not engaged in distracted driving; (3) skid marks left on the freeway suggested Jim had been traveling at 75mph, which was 15mph above the posted speed limit on that stretch of the highway.
A surprising claim denial
Brenda was obviously distressed by her husband’s death. Nonetheless, she decided to submit a claim to Jim’s life insurance company. In addition to submitting the death certificate, this particular company required that a claimant also submit any relevant police or autopsy reports. Brenda complied with this requirement.
A few weeks later, Brenda received a claim denial in the mail that she found baffling. In it, the claims adjuster stated that Jim’s policy contained an “inherently dangerous activity exclusion.” According to the insurance company, Jim’s decision to drive 15mph above the posted speed limit was “inherently dangerous” and, therefore, the insurance company had no obligation to pay the claim.
Brenda was shocked, especially given that she drove that same stretch of freeway every single day and knew that people routinely drove over 80mph there. Fortunately, she had the wherewithal to contact a lawyer from Jim’s former firm who specialized in the wrongful denial of life insurance claims.
It turns out the lawyer had plenty of experience with this particular insurance company. The company was notorious for invoking the “inherently dangerous activity exclusion” to justify claim denials. He knew that this company’s tactic was to deny most claims in the first instance, just to see if policy beneficiaries would give up and walk away from their claim. He also knew the company was rather quick to overturn wrongful claim denials when pressed by an attorney.
Consequently, Brenda’s lawyer contacted a lawyer for the insurance company the very next day. The two knew each other well from fighting over so many claim denials through the years. Brenda’s lawyer knew precisely what to say – there wasn’t a court in the country that would find the act of driving 15mph over the speed limit on a straight stretch of freeway during non-peak hours to be “inherently dangerous.” If the company forced him to sue on Brenda’s behalf, he would not only seek to recover the death payout she was due under the policy terms, he would also seek punitive damages for the company’s bad faith in denying the claim.
The insurance company lawyer knew Brenda’s lawyer well enough to know he wasn’t afraid to make good on his promise. Within a matter of days, the claim denial was overturned and Brenda received a check for the full payout amount.
This scenario is not unusual. The beauty of hiring a lawyer specializing in life insurance claim denials is that they are familiar with the policies, practices, and personnel of the insurance companies. They know exactly which buttons to push in order to get a claim denial overturned.If you are facing a wrongful life insurance claim denial, please don’t hesitate to contact our attorneys today. We’re here to help you recover the money your loved one intended for you.