Insurance policy intoxication exclusions are as ambiguous as they come

In a recent ruling by the Eighth Circuit the surviving husband of a mother of two was awarded accidental death benefits following his wife’s death. The deceased wife was covered by an ERISA governed accidental death policy insured by Unicare Life and Health Insurance Company. The autopsy reported listed the cause of death was “mixed drug intoxication.” The deceased had apparently ingested several different prescription medications and died as a result.

After denying the husband’s claim for benefits Unicare Life’s decision was reversed by a district court presiding over the ensuing lawsuit. In denying the husband’s claim Unicare alleged that the death was not accidental and therefore not covered by the policy and that if it was then it was excluded by the policy’s intoxication exclusion.

The Plan Did Not Contain the Necessary Discretionary Language to confer UniCare discretionary authority.

In reaching its decision, the district court focused on the language in the claims provisions to determine if the plan had conferred discretionary authority on UniCare. Finding that such discretionary language did not exist the court reviewed UniCare’s decision de novo, thereby giving the plaintiff husband a fair chance. Under the court’s de novo review, the parties were able to introduce evidence outside the administrative record to support their positions.

UniCare pressed forward various arguments to support its decision to deny the plaintiff’s claim. All of its arguments failed.

Death by “mixed drug intoxication” was an accident

As the court explained “an event is an accident if the decedent did not subjectively expect to suffer ‘an injury similar in type or kind to that suffered…” UniCare’s position was that the death was a suicide and therefore not an accident. The court disagreed.

UniCare pushed forward its secondary argument that the death resulted by intoxication and therefore excluded under the policy. The court, however, disagreed.

The Plan’s Intoxication Exclusion is Limited Only to Deaths Contributed to by Alcohol Intoxication

The plan’s exclusion stated that no benefit will be paid for a death that results from being intoxicated. “Intoxicated” was defined by the plan as “legally intoxicated as determined by the laws of the jurisdiction where the accident occurred.”

Because it was an exception to coverage, UniCare had the burden of proving that the exclusion applied. Based on the specific language of the intoxication exclusion the court found that the exclusion was limited only to deaths contributed to by alcohol intoxication and found in favor of the husband.

This case presented several interesting issues that were ultimately decided in the plaintiff’s favor. Of particular interest was the intoxication exclusion which defined “intoxication” according to the laws of the jurisdiction where the accident occurred. The applicable law defined intoxication with reference only to the public offenses of drunk driving and public intoxication. Since the wife’s death involved neither the exclusion did not apply. The court explained that a reasonable plan participant would have understood that the plan’s intoxication exclusion is intended to apply to death caused by committing acts, such as driving, while intoxicated; not to situations where the immediate cause of death is ingestion of a lethal mixture of drugs have been prescribed for use by the decedent.

Other jurisdictions have decided cases dealing with similar policy exclusions. Some policies, like the one in this case exclude coverage when the loss “resulted” from the intoxication. Others state that the exclusion applies where the loss occurred “while” intoxicated. If that doesn’t seem ambiguous enough these policies refer to the “jurisdiction where the accident occurred” for clarification on what “intoxication” means. Since most laws dealing with intoxication refer only to driving while intoxicated or public intoxication it leaves much open for interpretation when accidents do not occur in either of these contexts. It is interesting to see courts apply these exclusions as the rulings are almost as unsure as the policy language.

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