Many people these days have life insurance policies. Others have a separate (or additional) policy known as an Accidental Death & Dismemberment (“AD&D”) insurance. It’s important to distinguish between the two policy types. While most standard life insurance policies pay out when the policyholder dies of any non-excluded reason, an AD&D policy only pays out if the insured dies as the direct result of an accident.
In fact, most AD&D riders contain what is known as a “sickness exclusion.” Basically, this means that if a sickness contributed to the insured’s cause of death, an AD&D benefit will not be paid by the life insurance company. This is a significant exclusion because, among other things, AD&D policies typically pay about three times what a standard policy pays.
Thus, it should come as no surprise that insurance companies don’t like to pay AD&D claims. In fact, they will often go out of their way to try to avoid payment – largely in hopes that grieving beneficiaries won’t contest their claim denial reasoning.
As lawyers who specialize in the wrongful denial of life insurance claims (including Accidental Death & Dismemberment claims), we see this all the time. This article explores one interesting case where a life insurance company really tried to make an accident into an illness for the sole purpose of denying an AD&D policy payout.
No way to predict this outcome
Antonia was a woman in her mid-fifties. For most of her life, she had been extraordinarily healthy. In fact, she had never been hospitalized and had rarely visited a doctor outside of her yearly checkups. In her late forties, however, she had suddenly broken out in hives all over her body. She had no idea what caused the skin condition, but quickly saw a doctor to try to relieve the discomfort it caused.
The doctor sent her to an allergist who tested her for all sorts of food allergies. The doctor determined that her rash had likely been caused by a latent allergy to seafood. He discussed with her the fact that these things sometimes come on later in life and that it could go away, stay the same, or worsen. Since there was no telling what her body would do, he advised Antonia to avoid seafood for the time being. They would retest her in a year.
After that, Antonia generally avoided seafood altogether. She never had another outbreak of hives and didn’t even think about returning to the allergist after a year had passed from her initial attack. She just kept on living a healthy life.
For her 55th birthday, Antonia’s friends threw her a large pot-luck birthday party. Antonia, like the other guests, was thrilled with the wide array of foods available at the party. She told everyone that it was her goal that night to try each dish. None of the dishes were labeled, but since all of the chefs were at the party, it didn’t really seem necessary.
Several hours into the party, Antonia noticed that her skin was rapidly breaking out in hives. She alerted her best friend, Joan, who advised Antonia to sit down while Joan looked for an antihistamine. Before Joan could return to her friend, Antonia’s tongue swelled to several times its normal size, cutting off her supply of oxygen. While her friends looked on in horror, Antonia went into full anaphylactic shock, turned blue, and eventually died. By the time paramedics arrived, it was too late to save her.
An autopsy revealed that Antonia’s seafood allergy had evolved into a deadly shellfish allergy. It also revealed that her stomach contents contained a small amount of shrimp. In later discussions among friends, the group realized that someone had brought shrimp wontons to the party. Because none of the dishes were labeled, Antonia hadn’t even had the opportunity to avoid the dish – even if she had known her allergy had become so much more severe.
No AD&D coverage
A short time later, Antonia’s only son, Benjamin, filed a claim for benefits under her AD&D policy. Given that Antonia’s only prior allergy incident had been so transitory and the fact that the shrimp wontons were not labeled, Benjamin and his wife were certain the claim would be paid.
That’s not what happened, of course. A few weeks after submitting the claim, Benjamin received a claim denial letter in the mail. The stated reason for the denial was that Antonia’s death was the direct result of an illness – her shellfish allergy – and not the result of an accident. In light of the sickness exclusion in her policy, the insurer claimed it was not responsible for payment.
Benjamin’s friends found him a lawyer specializing in the wrongful denial of life insurance claims. The attorney reviewed the case and had a long talk with Benjamin about the situation. The truth was, courts had made conflicting decisions about whether a fatal allergy attack was a “sickness” that would fall within a sickness exclusion. In this case, however, the attorney believed the facts were on Benjamin’s side.
The attorney filed a case against the insurer and made the following arguments in court: (a) Antonia’s prior history with allergies was so trivial that there was no way anyone could have predicted she would die from eating such a small amount of shrimp; and (b) Antonia had not prepared or ordered a dish containing seafood. He also argued that the plain definition of an “accident” was “an unfortunate happening that occurs unintentionally.” Given the circumstances, no one could say Antonia’s death was intentional.
The court agreed. It awarded Benjamin the full AD&D policy payout, with interest.If you have had an AD&D claim denied on the same or similar grounds, please don’t hesitate to contact our firm for a free consultation. If we believe there’s an argument your loved one died as the result of an accident, we’ll fight to get you the payout you deserve. Call us today. We’re here to help.