Appealing the Denial of Your Accidental Death & Dismemberment Claim

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

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  • Accidental Death and Dismemberment policies are often riders on life or health insurance policies
  • Policies are usually limited by many requirements called exclusions
  • Because most deaths do not fit the definitions and exclusions policies contain, many claims are denied
  • A denial can be justified, but often claims are denied wrongly through mistake or bad faith

Accidental Death and Dismemberment (AD&D) policies are typically riders on life insurance or health insurance policies. They’re usually not very expensive because it is extremely unlikely that insurance companies will have to pay out a claim.

So what exactly do AD&D plans cover and why are so few claims paid? We’re going to take a deep dive into what these policies are, what they cover, some of the common reasons claims are denied, and what you might be able to do about it.

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The AD&D Claim

We already saw that AD&D covers accidental death and dismemberment. So what exactly is an accidental death? What, as far as insurance companies are concerned, is dismemberment?

The first reason that AD&D claims are so rarely paid is that the policies only cover some very specific deaths or injuries, unlike life insurance policies that pay in almost all circumstances when the policyholder dies.

What deaths are accidental?

What is considered an accidental death will vary across policies and companies. Generally speaking, though, a death is only categorized as accidental if it is not caused by a long list of potential risks, such as these:

  • Suicide or attempted suicide
  • Drug use
  • Driving a vehicle while intoxicated
  • Injury or death sustained while intoxicated
  • Death during surgery
  • Physical or mental illness
  • War
  • High-risk activities, such as skydiving

Just taking a look at a few of these items shows you why AD&D policies aren’t usually invoked. Physical illness is by far the leading cause of death. According to the Centers for Disease Control, disease or suicide accounted for nearly two million deaths in 2017, while unintentional injuries accounted for less than 200,000.

When you see that the unintentional injuries category includes causes of death that an AD&D policy wouldn’t cover — driving while intoxicated or death from high-risk activities, for example — it demonstrates how rare an accidental death is. These cases represented less than five percent of all deaths in 2017.

What is dismemberment?

Dismemberment literally means the loss of a limb. In terms of AD&D policies, the meaning is a little broader, but keep in mind that the “accidental” limitation for deaths also applies to dismemberment. Loss of a limb when the policyholder was driving drunk or bungee jumping would not be covered by an AD&D policy.

That being said, AD&D policies typically cover accidental loss of limbs, loss of function of a limb, loss or partial loss of a bodily function (sight for example), and partial or full paralysis.

What is double indemnity?

AD&D insurance is sometimes called double indemnity — probably more commonly before the excellent Billy Wilder film Double Indemnity associated it with murder schemes.

If you see the term, don’t be confused. It’s simply a reference to an AD&D rider connected to a life insurance policy meaning that, in cases of accidental death, the beneficiary will receive a double payment: one for the life insurance and one for the accidental death.

If you have an AD&D rider on your life insurance and die from a heart attack, only the life insurance policy will pay out, but if you’re in a train wreck or some other accidental death, both the insurance policy and AD&D policy will pay your beneficiary.

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Exclusions and Definitions Can Make or Break a Claim

As we said, most AD&D claims are denied. Typically, the denial is for one of two reasons. The insurance adjuster will determine that the death or dismemberment was either not accidental and/or within an exclusion.

We’ve already seen how insurance companies define “accidental” in the context of these policies. As if that doesn’t limit them enough, though, AD&D policies also include exclusions.

What are policy exclusions?

A policy exclusion is an exception to what is covered by the policy. All insurance policies have some exclusions, that’s why people need to have flood insurance even though they already have homeowners insurance. Flood damage is an example of an exclusion in most homeowners insurance policies.

There is a certain amount of overlap between the two categories mentioned above for AD&D policies. The way that companies define what is “accidental” death or dismemberment in AD&D policies is by creating exclusions.

Is a skydiving death not “accidental” or is it not covered because the policy excludes those deaths from a claim being made…? The answer is irrelevant. What matters is that the claim will be denied, at least to most people, and not the exact reason why.

Exclusions in AD&D policies can be thought of as the specific ways that the company is defining or limiting what is considered “accidental.” Insurance companies have a lot of experience and a lot of lawyers, so they’re careful to spell out exactly what they won’t cover if there’s even a slim possibility that a cause of death could be seen as an accident.

Normally, if the claim is denied due to an exclusion in the policy, there’s little recourse. It may be worth consulting an attorney if it seems to fall into a grey area, though. And if you live in California, some state laws limit what AD&D or any other insurance policy can deny a claim for, regardless of the exclusions in the policy.

Most policyholders have policies that were chosen for them. In other words, they did not have the opportunity to shop around. As such, they may not have direct knowledge of the definitions and exclusions in their own policies. However, rest assured that the insurer has thought long and hard over what to include and what to exclude in the policies they offer.

For example, some will exclude accidental death or dismemberment claims caused by an accident that occurred as a result of the insured driving while intoxicated to any degree.

Other policies may be more lenient and only deny the claim if the insured was driving over the legal limit of intoxication. This one distinction can make or break a claim.

Right to Appeal — Use It or Lose It

Most people think that once a decision is reached, it’s final. There actually aren’t very many circumstances where that’s true, though. You’re allowed to appeal a court decision, you can appeal a tax finding, you can argue with the bank about their lending decisions, and you have a right to appeal the decision an insurance company makes on your claim.

Claims are frequently denied in error, based largely on a claims handler’s interpretation of events and on the desire to protect the insurance company’s bottom line.

Depending on how the insurance was obtained, your appeal may be subject to a short time limit (usually 90 days), within which you must file the appeal or lose your right to do so. It’s essential, therefore, to consult with an attorney after a denial if you feel your claim was valid.

Other Reasons your Claim Might be Denied

We all understand that insurance companies have an interest in denying a claim, but sometimes they deny a claim through simple error and sometimes they deny a claim because the claim is not covered by the policy.

Unfortunately, there are plenty of instances where an insurance company will deny an AD&D claim for the wrong reason. This is broadly known as a bad faith denial or operating in bad faith.

All contracts, including insurance policies, contain both the promises expressly made in the agreement and an underlying obligation to show good faith and fair dealing.What that means is that the insured is agreeing not to lie or try to trick the company into paying a claim it shouldn’t and the company can’t deny a rightful claim.

If you try to collect on a claim through deceit, you can face civil and criminal penalties for fraud. If the insurance company tries to deny your rightful claim through operating in bad faith, they can be sued and have to pay not only the claim but punitive penalties as well.

Calling the accident non-accidental

Considering that the claims are being made under an accidental death and dismemberment policy, the easiest way to avoid paying the claim is to say that death or dismemberment wasn’t an accident.

An adjuster may deny a claim by saying that the death was the result of suicide or they may say that the underlying injury or death was attributable to underlying health issues. For example, someone with a heart condition may die in a car wreck, and the insurance company may deny the claim by arguing the heart condition caused the death rather than the car accident.

To the extent that such an argument is made to avoid paying a valid claim, that would be a bad faith situation.

In a recent case, a court held that Metlife had improperly denied a dismemberment claim when they said that diabetes was the cause of the loss of a limb. The policyholder had been in a car wreck that severely damaged his leg, and because of complications in the healing — some due to his diabetes — the leg had to be amputated.

The appeals court held that the claim should have been honored and that an underlying condition making someone more susceptible to death or dismemberment from an accident doesn’t merit denying the claim.

Invalidating the policy (recission)

Before you can get an AD&D policy, you have to apply. The application includes a lot of questions about your medical history. Once you’ve had it for a few years, one of the only ways the company can invalidate your policy and refuse to pay an otherwise valid claim is to establish that you lied about something important on your application.

This is called a material misrepresentation, and even if it is unrelated to a claim, a company can use it to cancel the policy as if it never existed.

If you didn’t mention that you’ve had multiple heart attacks, that would be a valid reason to rescind the policy. Sometimes companies try to rescind policies based on meaningless mistakes or omissions, though. It can be especially telling when the misrepresentation is discovered years later and only after an otherwise valid claim is made.

When an insurance company investigates ways to avoid having to pay a claim rather than investigating the claim itself, it is operating in bad faith. Proving this, however, will likely require an experienced insurance attorney.

Claiming the policy has lapsed

If you don’t pay your insurance premium, the company can cancel your policy. If the policy is canceled, obviously, a claim will not be paid. Sometimes, though, an insurance company will cancel a policy for a missed payment when they shouldn’t or aren’t allowed to by law.

In different states, there are different rules in place, but in general insurance companies have to comply with certain regulations to cancel a life insurance policy or AD&D policy. These rules are designed to protect customers and ensure that a policy isn’t canceled improperly.

One example of the kinds of laws that insurance companies must abide by when canceling a policy is requiring a month between missing a payment and canceling a policy. Some states require the insurance company to contact or attempt to contact the policyholder before canceling the policy.

Importantly, an insurance company will not be able to avoid paying a claim if the payment was missed due to the death of the policyholder. If the insurance company can’t show the policy was validly canceled before the date of the death or dismemberment, they will have to pay the claim.

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Bringing it All Together

It would be ideal if having an Accidental Death and Dismemberment policy meant that if there was an accidental death or dismemberment, the policy would pay out. As we’ve seen, though, it isn’t always that simple.

AD&D policies are written in very specific ways to define and exclude many manners of death or dismemberment that you would think should be covered. In addition, insurance companies will sometimes deny claims wrongly. Denials are commonly issued if:

  • the cause of injury or death was excluded from the policy
  • the cause of injury or death wasn’t an accident
  • the policy was invalidated due to misrepresentations on the application, or
  • the policy lapsed

In some cases, these circumstances can lead to a claim being denied properly. Sometimes, though, companies will deny a claim improperly, either because of a mistake or because of an effort to protect their bottom line. If your claim is denied wrongly, it can be difficult to appeal the decision alone.

Did we answer all of your questions about what an AD&D claim is and why it might be denied?

Keep in mind that each AD&D policy is different, as are the circumstances surrounding every claim. Understanding your specific policy and claim will be the most important factor in determining whether your claim was wrongly denied or not.

To help you navigate the policy and appeals process, you should consult an experienced insurance attorney. Enter your zip code above to start comparing insurance.

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