AD&D insurance claim denials are common but can be appealed

By Paul Russell, LegalMatters Staff • Many people have accidental death and dismemberment (AD&D) insurance through their workplace. But often, in the event of injury or death, that coverage is denied, says Ontario disability and personal injury lawyer Joshua Goldberg.

“The terms ‘accidental death and dismemberment’ seem straightforward but insurance companies often seem to find excuses to reject claims,” says Goldberg, principal of Joshua Goldberg Law. “When that happens, victims’ families should launch legal action to obtain the compensation they deserve.”

As the name implies, AD&D insurance is designed to cover people who die or are severely injured in an accident, he says.

“This coverage is also designed to compensate people for the loss of body parts or certain abilities, such as hearing, speech and sight,” Goldberg tells LegalMattersCanada.ca.

“Benefits are calculated as a percentage of the principal sum,” he explains. “For example, if you lose your thumb and index finger in an accident, you should receive a portion of the premium, with the full amount paid out to those who die as a result of an accident.”

Deaths by natural causes are not covered

This coverage cannot be claimed if the policyholder dies of natural causes, such as a heart attack or stroke, Goldberg says.

“Death by suicide or as a result of drunk driving or the use of illegal narcotics are also generally not eligible,” he says.

Goldberg adds other exceptions include death or injuries that occur:

• while a person is committing a crime;
• in a high-risk profession such as policing or the military;
• in war or a terror act;
• self-inflicted; and
• from extreme sports, such as parachuting, race car driving, etc.

“People take out AD&D insurance because they want their family protected in case they are severely injured or killed in an accident,” he says. “Unfortunately, many policies include significant coverage limitations that are not readily evident and that lead to a denial of a claim.

“Most people will assume they have broad coverage under their AD&D policy, but the wording of the policy is drafted in such a way as to narrow down eligibility to specific circumstances, excluding many claims,” Goldberg adds.

He says the public should be aware that any insurance policy is essentially a contract in which both parties agree to a set of definitions and terms.

• A primer on successfully claiming LTD benefits in Ontario
• Clear your sidewalks after a snowfall or you could face liability
• It is dangerous to be a pedestrian during the winter

“Sadly, contractual definitions and terms are often open to interpretation,” says Goldberg. “That is why families need to retain a lawyer experienced in handling AD&D policies if a claim is denied.”

He encourages families contesting a denial to gather all insurance policy documentation, along with any medical, hospital or autopsy records, death certificate, police report and incident/accident reports.

“There is also a two-year time limit to launch an appeal of a claim denial,” Goldberg notes.

Cause of death can be disputed

He says that the exact cause of an accident is not always obvious and that insurance companies will often draw a distinction between a “contributing” cause and one that substantially led to someone’s death or dismemberment.

Goldberg points to a recent Supreme Court of British Columbia case where an insurance company was ordered to pay a woman $400,000 after her husband died after hitting his head in a fall.

According to the judgment, the insurance company denied the claim, stating his fall was caused by heavy consumption of alcohol and narcotics. A toxicology test found “ethanol, acetone, isopropanol and benzodiazepine sedatives” in his system.

The judge sided with the widow and ordered the benefit to be paid. As he noted, “I have concluded … [his] death was an accidental death, independent of any other cause, and therefore covered by the policy, and that the claim ought to have been allowed.”

If an AD&D claim is rejected, policyholders or their families still have options, says Goldberg.

“A denial from an insurance company can always be appealed, and many should,” he says. “A personal injury lawyer can guide you in that process to ensure you have the best chance of receiving the benefits you are entitled to under your AD&D policy.”