Driving Under the Influence – An Accident for Purposes of Life Insurance’

Insurers are confronted with a myriad of fact situations that require them to make difficult determinations as to potential coverage.

A federal district court recently ruled that Minnesota Life Insurance Company (“Minnesota Life”) made the proper decision in denying double indemnity accidental death and dismemberment benefits related to a death that occurred while an insured was driving under the influence of alcohol. Minnesota Life Ins. Co. v. Scott, 330 F.Supp.2d 661 (E.D. Va 2004).

In Scott, the insured died as a result of a single car accident in Westmoreland County, Virginia. While the road and weather conditions were safe, evidence suggested that the insured was speeding at the time of the accident and his blood alcohol concentration was at least twice the legal limit. Of note, the insured had pleaded guilty to driving under the influence several years prior to the fatal accident. As a result of the guilty plea, the insured was required to attend an alcohol safety course.

The insured maintained life insurance with Minnesota Life Insurance Company. Minnesota Life paid the basic and optional life insurance benefits, but refused to pay any proceeds of the Accidental Death and Disbursement policy riders to the insured’s estate. Minnesota Life filed a declaratory judgment action, requesting that the court support the decision to deny the accidental death benefits. Minnesota Life contended that it was required to pay the accidental death insurance proceeds because: (1) the insured’s death was a foreseeable consequence of the insured’s actions and as such was not an accident within the insurance policy’s meaning; and (2) in the alternative, a crime exclusion within the policy should apply because the insured was participating in a crime, driving under the influence of alcohol, which resulted in his death.

In response, the insured’s estate argued that the insured’s death was unexpected, unintended, and unforeseen, resulting in an accident within the meaning of the policy. In addition, the estate argued that the crime exclusion was ambiguous, contrary to a reasonable insured’s expectations, and not applicable to a fact situation involving driving under the influence.

After reviewing the motions for summary judgment submitted by the parties, the Court ruled that Minnesota Life was correct in its denial of benefits. First, the Court ruled that the insured’s death was not an accident within the meaning of the policy. In addressing the “accident” question, the Court focused on the requirement that for a death to be accidental, it must be unintentional, unexpected, and unforeseen. The Court firmly stated that by driving under the influence of alcohol, the insured exposed himself to a substantial and foreseeable risk of death. Moreover, the insured, in the Court’s view, fully understood the dangers of drinking and driving. In summary, the Court ruled that the insured exposed himself to a substantial and foreseeable risk of death, which, by definition, cannot be accidental in nature.

Despite having already finding support for Minnesota Life’s position, the Court also analyzed the applicability of the crime exclusion. As an initial matter, the Court ruled there was no ambiguity in the crime exclusion and stated that driving under the influence of alcohol is a crime. Under the Court’s analysis, the simple facts that a commission of a crime and the insured’s death occurred concurrently was not enough to find that the crime exclusion applied in blanket fashion. Instead, the Court opined that the death in question must result from the participation in, or attempt of, a crime or felony. After examining the materials submitted by the parties, the Court found the insured’s participation in the crime of driving under the influence was the cause of his fatal car crash. Thus, the crime exclusion included in the policy precluded a recovery of benefits.

While other courts have reasoned that driving under the influence may be a justification for denial of accidental death benefits, this court’s opinion is significant for several reasons. First, the language of the opinion is quite strong in its conclusions concerning the question of whether an accident took place. One may argue that the specific facts of the case allowed such conclusory language such as the insured’s blood alcohol level at the time of his death and his prior conviction for driving under the influence.

However, the court’s language is clear and forceful on the issue. Second, the court’s analysis of the crime exclusion included a “causation” analysis wherein the court attempted to determine if the commission of the crime led to the death in question.

While the specific facts involved in the case including the weather and the insured’s blood alcohol level may have made the causation analysis relatively straight-forward, future cases may not be so clear.

Andrew S. Boris is a partner in the Chicago office of Tressler Soderstrom Maloney & Priess. His practice is focused on litigation and arbitration of insurance coverage and reinsurance matters throughout the country. Questions and responses to this article are welcome at aboris@tsmp.com The Tip of the Month runs each month on claimsguides.com.