Controlled Substance Exclusions In Accidental Death Policies

Certain types of insurance policies, normally called "accidental death" policies or something similar, provide benefits if the person insured under the policy dies in an accident. Those policies often include exclusions or limitations on coverage that apply under certain circumstances. One common exclusion or limitation eliminates coverage if the deceased insured had drugs or alcohol in their system at the time of death.

The impact of such controlled substance exclusions, and beneficiaries' ability to overcome them and receive benefits, depends mostly on the exclusion's language. Three general types of controlled substance exclusions can be found in accidental death policy. First, an exclusion that prohibits coverage if the insured had drugs or alcohol in their system at the time of death. Second, an exclusion that eliminates coverage if the insured had drugs or alcohol in their system and such substances directly or indirectly caused the insured's death. Third, an exclusion that forecloses coverage if the insured's intoxication by drugs or alcohol caused or resulted in the insured's death.

The first category of drug or alcohol exclusions is the most difficult to avoid. That's because there's no review of whether the insured's intoxication had anything to do with the death. It's enough that the insured simply had drugs or alcohol in their system. Now, many states prohibit this type of exclusion because of its harshness and the fact that the insurance company can avoid paying benefits even if the insured's death and the intoxication were completely unrelated. In those states that don't statutorily prohibit such exclusions, their courts will still read a cause-and-effect requirement into the exclusion as a matter of policy to avoid unfair results.

The next category of exclusion, which allows for benefits denial if the insured's intoxication directly or indirectly caused death, is not very favorable to beneficiaries either. The use of "indirectly" allows the insurance company to avoid benefits even if the insured's intoxication was merely a minor factor in the insured's death. Thus, even if something else was more important in causing the insured's death, such as a chronic condition, a "direct or indirect cause" controlled substance exclusion can still apply even if the intoxication was not the primary or predominant cause of death. 

The final category of controlled substance exclusions is the most favorable to insureds. An intoxication exclusion that only applies if the intoxication "caused" or "resulted in" the insured's death requires the insurance company to prove that the intoxication was more than a contributing factor in the death or a remote cause of the death. Under this type of controlled substances exclusion, the insurance company must demonstrate that the insured's intoxication was the primary cause of death, such that death wouldn't have occurred except for the intoxication.  

The second and third categories of controlled substances exclusions often necessitate a fight among medical experts regarding the insured's cause of death and what connection, if any, the insured's drug or alcohol use had to the death. Autopsies, toxicology reports, and medical records are often an important part of such arguments. The insurance company will have the burden of proving that the controlled substance exclusion applies.