Our law firm specializes in overturning the wrongful denial of life insurance claims. As such, we are generally not surprised by any bogus reasoning a life insurance company tries to use in order to get out of paying on a valid claim. In fact, the more ludicrous their denial justifications, the easier they make it for us to overturn those denials in court.
One of our favorite ways to beat insurance companies at their own game is to simply apply logic to an illogical claim denial decision. These illogical claim denials are often the result of an insurance company trying to invoke vague policy language in an effort to avoid payment.
Along those lines, one of the most vague provisions we see in life insurance policies is what's known as an “inherently dangerous activity exclusion.” As the name suggests, these provisions relieve the life insurance company from paying out on a claim if the policyholder dies while doing something that is remarkably dangerous.
The more legitimate life insurance companies specifically define within the policy exactly what types of activities are considered to be “inherently dangerous.” Things like scuba diving, sky diving, and bungee jumping are among the things that are typically listed.
Less scrupulous insurers, however, don't define the term “inherently dangerous activity” at all. They purposefully leave the term vague so they can invoke the policy exclusion in response to a whole variety of activities that may (or may not) be dangerous. As maddening as these claim denials can be, we can often use the insurance company’s own prior claim decisions to disprove their ad hoc conclusion that the current policyholder’s actions should fit within the exclusion.
This article presents a case right along these lines.
A family outing
This case involved the death of a 58 year old man named Joel. Joel was a retired Navy admiral, a husband, and a father of three adult sons. Since his early 30s, Joel had had a life insurance policy in place. The policy payout was $1,750,000. Joel had designated his wife Angela as the sole beneficiary.
One summer day, Joel and his family were out doing what they loved to do every summer -- boating across the local lake and water skiing anytime one of them felt the urge. At around 3 o'clock in the afternoon, Joel was feeling exceptionally tired.
He laid down on a seat in the back of the boat when suddenly, the unthinkable happened. The boat hit a large wake causing Joel’s body to be thrown out the back of the vessel. Unfortunately, Joel landed on the water at such an awkward angle that it snapped his neck and killed him instantly.
Police and paramedics arrived at the scene within an hour and the police performed a thorough investigation. Ultimately, they ruled that Joel’s death to be a complete accident.
Boating as “inherently dangerous”?
A few weeks after Joel's funeral, Angela made a claim to his life insurance company. As requested by the insurer, she submitted a copy of Joel’s death certificate and the police reports relevant to the incident. Angela had no reason to anticipate any problem with her claim.
Nonetheless, one week later she got a claim denial letter in the mail. The life insurance company claimed Joel's policy contained an “inherently dangerous activities exclusion” that relieved the company from its obligation to pay if Joel died while engaged in some dangerous behavior. The letter then stated that “since boating is such an inherently dangerous sport, we have no choice but to deny your claim.”
To Angela, this explanation seemed ridiculous. Their family had been boating almost every day of every summer for decades, and no one had never even had an injury let alone a brush with death. Fortunately, Angela had the wherewithal to contact an attorney specializing in the wrongful denial of life insurance claims.
When Angela spoke to the attorney, she was impressed that he had an extensive background in negotiations and litigation with this particular life insurer. In fact , he had handled dozens of cases against this insurance company in the past. Thus, what he told Angela next shocked her.
The attorney had recently been involved in a negotiation with this insurance company in a case where a young man died as the result of texting while driving. In that case, the insurer had not taken the position that distracted driving was an “inherently dangerous activity” that would justify use of the exclusion. Yet, the attorney was able to come up with two quick statistics that made the company’s use of that exclusion seem random at best: (1) according to the Coast Guard, motorized boating caused an average of just 35 deaths per year in the United States; yet (2) according to the National Highway Traffic Safety Administration, distracted driving causes over 3,000 deaths per year.
In other words, distracted driving caused nearly 100 times the number of deaths per year than motorized boating, yet the latter activity was deemed “inherently dangerous” while the former was not. This showed how arbitrary the insurer’s invocation of the “inherently dangerous activity exclusion” actually was.
When the attorney took the life insurance company to court on Angela’s behalf, he presented the court with these findings. Ultimately, the court decided that Angela’s attorney was right. The insurance company had acted in an “arbitrary and capricious” manner when it tried to use the “inherently dangerous activities exclusion” to deny Angela’s claim. The court awarded Angela the full policy benefit, plus interest.
Unfortunately, life insurance companies make arbitrary claim denial decisions all the time. To add insult to injury, most beneficiaries will never find out unless they hire a specialized attorney to help overturn their claim denial.If you have received a life insurance claim denial for any reason that doesn't seem right to you, please call our office today. Will provide a free consultation and, if we possibly can, will help you get the money you're owed.