According to the Centers for Disease Control, unintentional injury is the leading cause of death among people ages 1 to 44.  For this reason, Accidental Death and Dismemberment (“AD&D”) Insurance should be an essential component of insurance coverage for most families.  As preventative care expands and baby boomers remain active, accidental deaths will likely continue to rise as the leading cause of death among individuals.  While AD&D coverage is important to protect families from unforeseen injuries and death that can have severe financial repercussions, insurance companies do not like to pay these claims as they often attempt to limit the scenarios in which an insured can recover an AD&D benefit by placing “sole cause” provisions in AD&D policies.  These provisions include restrictive language requiring that an insured’s loss be the direct result of accidental injury, independent of other causes.  Using this language, insurance companies attempt to deny benefits on the basis that an illness or preexisting condition caused or contributed to an accident.

It should not be surprising that insurers interpret these “sole cause” provisions expansively in an attempt to deny AD&D benefits.  We recently wrote here about the important and insured-friendly Ninth Circuit Court of Appeals decision in Dowdy v. Metro. Life Ins. Co., 890 F.3d 802 (9th Cir. 2018).  In Dowdy, the court rejected an insurer’s claim denial and held that diabetes did not substantially contribute to amputation of beneficiary’s leg below the knee after he suffered a serious injury to his leg as a result of an automobile accident, and therefore loss was covered.  The court further held that the exclusion for “any loss caused or contributed to by illness or infirmity” did not apply to the role that diabetes played in causing the amputation.

In Kellogg v. Metropolitan Life Insurance Co., 549 F.3d 818 (10th Cir. 2008), the Tenth Circuit addressed such a provision and looked at whether the insured’s death was caused by his purported seizure prior to car accident.  Kellogg is recognized as one of the leading cases regarding accidental injury/losses involving pre-existing medical conditions and involved an AD&D claim governed by ERISA.

In Kellogg, a witness observed the insured experience an apparent seizure immediately before driving off the road and crashing into a tree.  The insured later died of a brain hemorrhage resulting from injuries sustained in the crash.  The insured was covered under a policy that provided benefits if the insured had an “accidental injury that is the Direct and Sole Cause of a Covered Loss.”  The policy defined “Direct and Sole Cause” as a “direct” and “independent” cause of loss.  The policy also contained an exclusionary clause exempting from coverage “any loss … caused or contributed to by … physical or mental illness or infirmity.”  The insurer denied the claim for AD&D benefits, reasoning the accident would not have happened but for the insured’s illness.  The Tenth Circuit rejected that rationale, concluding “the car crash—not the seizure—caused the loss at issue, i.e., [the insured’s] death, and therefore the exclusionary clause of the policy does not apply.”  Id. at 831.

The Tenth Circuit further looked at the plain meaning of the ERISA Plan provisions and the inequality of bargaining position between insurance companies and insureds.  The court found that these rules of construction, including contra proferentem, apply equally to ERISA cases governed by federal common law.  The court noted that the “[t]he Plan does not contain an exclusion for losses due to accidents that were caused by physical illness, but rather excludes only losses caused by physical illness.”  Id. at 832.  Ultimately, the Court determined that a “reasonable policyholder would understand this language to refer to causes contributing to the death, not to the accident.”  Id.

The Kellogg court explained that courts have long rejected attempts to preclude recovery on the basis that the accident would not have happened but for the insured’s illness.  “As then-Judge Taft wrote in Manufacturers’ Accident Indemnity Co. v. Dorgan, 58 F.945, 954 (6th Cir. 1893), “if the deceased suffered death by drowning, no matter what was the cause of his falling into the water, whether disease or a slipping, the drowning, in such case, would be the proximate and sole cause of the disability or death, unless it appeared that death would have been the result, even had there been no water at hand to fall into.  The disease would be but the condition; the drowning would be the moving, sole, and proximate cause.”  Id.  Yet, like those courts, the Kellogg court rejected MetLife’s denial decision, and remanded the matter to the district court “with directions to enter judgment in favor of Kellogg on the administrative record.”  Kellogg, supra at 833.

Other courts following this analysis have come to the same conclusion.  In Ferguson v. United of Omaha Life Insurance Co., 3 F.Supp.3d 474, 483 (D. Md. 2014), the District Court of Maryland applied the analysis of Kellogg where an insurance company denied AD&D benefits due to the insured’s medical insurance.  In that case, the insured suffered from epilepsy that caused him to suffer an apparent seizure twice while swimming.  The first incident, in February 2010, led to his near-drowning and a three-day hospitalization, and the second incident, on September 15, 2010, resulted in his death.  The court considered whether there was substantial evidence that the insured actually suffered a seizure that caused him to drown on September 15, 2010, and thus, whether it was a seizure that caused him to drown.

The district court in Ferguson went on to opine that a provision that excludes sudden, unexpected, unforeseeable and unintended events that are independent of sickness and all other causes “would appear to eliminate the possibility of any event ever being considered an accident.”  Id. at 486.  The district court added, “If the insured slips and falls on an icy sidewalk, it would not be an accident under this language because the presence of ice on the sidewalk would be a cause of the event.”  Id.

When taken literally, these “sole cause” provisions would exclude coverage for a number of common sense scenarios that would reasonably be labeled an accident.  Following the analysis in Kellogg, courts have considered the cause of loss to be independent of the cause of the accident.  These courts have denied coverage only when the disease or pre-existing condition was a cause of the death or injury, not when it was simply the cause of the accident that lead to a death or injury.

Conclusion

While AD&D insurance provides coverage for any accidental death or dismemberment, it is often difficult to separate pre-existing conditions and disorders that may have contributed to an accident from the accident itself.  This complicates the coverage analysis in AD&D policies with “sole cause” provisions.  For instance, it is plausible to surmise that an individual’s history of heart disease caused her to have a heart attack while driving, which then caused an accident resulting in death.  An insurer will use the “sole cause” provision to argue that the heart attack caused or contributed to the accident.  However, considering the analysis of Dowdy, Kellogg and opinions following these decisions, a court must separate the loss of the insured from the accident, and consider whether the insured would have suffered a loss but for the circumstances of the accident.  Under this analysis, even when though a pre-existing condition or disease may have caused or contributed to an accident, recovery of AD&D benefits is likely.