AD&D Policy Beneficiaries’ Recovery Limited To Death Benefits — No Recovery for Dismemberment Injuries Leading To Death

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In Malbrough v. Kanawha Insurance Co., 2015 U.S. Dist. LEXIS 48394 (W.D. La. Apr. 9, 2015), the U.S. District Court for the Western District of Louisiana was asked to determine the benefit payable to the plaintiff beneficiaries under an Accidental Death and Dismemberment insurance policy issued by Kanawha. The court held in favor of the insurers, ruling that the beneficiaries were limited to death benefits only, and not to additional benefits relating to the loss of the decedent’s foot.

Following the death of the insured after he was backed over by a bulldozer, the plaintiffs filed claims as beneficiaries under the Accidental Death and Dismemberment at issue. The beneficiaries claimed that, under the policy, they were entitled to benefits for both the death of the insured and for benefits relating to the amputation of his foot, which had taken place after the accident, yet before he succumbed to his injuries.

The policy provided $50,000 in basic accidental death and dismemberment benefits and up to $300,000 in supplemental accidental death and dismemberment benefits. Kanawha paid $300,000 in relation to the death of the insured, but refused to make payments relating to any other benefits, asserting that the beneficiaries were not entitled to both dismemberment and death benefits under the policy. The policy stated, “When an Accident results in more than one of the Injuries listed in the Table of Accidental Death and Dismemberment Benefits [a]nd the Injuries provide equal Benefits, We will pay one such Benefit, or We will pay the Benefit available for the larger or largest such loss.”

The court rejected the plaintiff’s arguments that the provision referring to “injuries” listed in the table of accidental death and dismemberment benefits did not apply to death since death is not an “injury” in its ordinary meaning. The court explained that this argument was irrelevant because the policy provided a definition of “injury,” which stated that an injury is “bodily harm resulting directly from an Accident and independently of all other causes.” The court stated that although “bodily harm” and “injury” do not necessarily include death, the policy’s definition did not contain language limiting coverage to only those injuries that do not include loss of life. Therefore, death did come under this definition. The court also explained that, according to the Table of Accidental Death and Dismemberment, the benefit payable for loss of life is at 100 percent of the maximum benefit under the policy, and the benefit for the loss of a foot was at 50 percent. To award both would result in a payout of 150 percent of the maximum benefit available. The court described this outcome as “illogical” and awarded summary judgment to the insurer.