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Drug Use and Drunk Driver Exclusions |
Many types of insurance policy contracts contain exclusions applicable to drunk driving situations or other losses incurred due to drug or alcohol consumption. Typically many Accidental Death & Dismemberment (AD&D) policies contain such exclusions, as do a number of auto rental insurance coverage endorsements. |
In most cases the courts will uphold specific and clearly worded exclusions in life or AD&D insurance policies where it is obviously proven that intoxication was the cause of the accidental death, but the courts will always examine specifics of each individual case, hence the insurance claims representative must be very detailed in the investigation.
One question that often arises under life or AD&D insurance contracts is whether the "accident" utilizing alcohol or drugs was truly an accident, or might have been suicide. If a policy does not exclude drug or alcohol-related loss, but does exclude loss due to suicide, the investigation must show without reasonable doubt that the cause was a suicide, such as a specific suicide note, message or other obvious indication. |
In one case the court was called upon to determine if the terms of the coverage contract rendered the insurance as "illusory" and the contract "unconscionable." The plaintiff against the insurer in this case had rented a car, and elected to pay an additional daily fee for optional supplemental liability coverage of $1 million. The terms of the insurance were printed on the form. Five hours later the renter was involved in a fatal accident, having crossed the center line and colliding with another car in which a passenger was killed and other occupants seriously injured. The renter was found to have a blood alcohol level of .193, well beyond the state's drunk driving limit. |
The insurer denied coverage under the terms of the contract, which included a boldly marked exclusion for any "illegal purpose" use, including drunk driving. The insured sued the insurer seeking coverage, arguing that the coverage was "illusory," (similar to a "reasonable expectation" argument) or simply "unconscionable." The court held that the renter could not reasonably expect the insurer to cover him for illegal driving, and upheld the exclusion that barred coverage.
Learning when and how policy exclusions apply is an aspect of every course offered at Crawford Educational Services. While no two cases are identical, our students learn how to conduct the necessary investigation so that problems and expensive litigation can be avoided. For complete course listings, visit our website.
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Take Note! is a marketing tool of Crawford Educational Services, the training division of Crawford & Company. The contents and any referenced external materials are not intended to and should not be construed as legal or other professional advice, nor is such information intended to be nor should it be used as a substitute for legal or professional counsel. These materials merely convey general information about claims and claims related situations often encountered by claims professionals. While an effort is made to be accurate, Crawford & Company does not represent, warrant, promise, or imply that this information is current, accurate, thorough, or adequate.
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