John is driving home when a drunk driver crosses the center line hitting Johns car killing him.
Johns life insurance pays out double because it is an accident.
Does the life insurance company go after the drunk driver/drunk drivers insurance? “We wouldn’t have had to pay out on that claim had you not killed our client”.
I’ll leave the life insurance question to the experts, but I’m pretty sure that the auto insurance company will do their best to go after the drunk driver’s insurance, or their assets/estate (if they die too) for the cost of the car, medical and funeral expenses, etc.
No, but Edward G. Robinson starts asking hard questions about actuarial tables and then you end up admitting your culpability:
Yes, I killed him. I killed him for money - and a woman - and I didn’t get the money and I didn’t get the woman. Pretty, isn’t it?
Stranger
Your driver’s insurance won’t cover you if you have an accident while driving drunk.
In the UK, the drunk driver’s insurance would not cover any of their costs or losses, but the third party (or their dependents) would be able to claim.
AFIK Life Insurance is unconnected with liability and would pay out in full. John’s family would potentially also have a claim against the DD’s insurance.
I’m not an insurance expert, but I’m nearly positive the life insurance would just pay and be done with it. If the family got some kind of payout from their car insurance, then the car insurance company would probably go after the other driver’s insurance company.
There’s no question that John is dead, and life insurance doesn’t care about fault, like property and casualty might, other than suicide in the first couple of years, or if the insured did something he said he wouldn’t (skydiving or something).
I wonder if I know what you mean.
mmm
I wonder if you wonder.
Stranger
I thought you might.
mmm
But that’s the crux of the question. Of course the life insurance company would eventually have to pay out… so can the drunk driver’s family or insurance company recoup that payout back once they reach the actuarial age at which John was expected to die? Or just half of it? Should the award be limited by the statistical odds of a double payout in the future? (“There’s a 1 in 5 chance that he’d die of an accident in his lifetime, so we award Liberty Biberty only 4/5 of the amount.”)
Can the insurance company sue the city for the double indemnity amount if John slipped on an icy sidewalk and cracked his head open? Or the tire manufacturer if John had a blowout and drove off the cliff?
It’s easy to pick on drunk drivers, because it’s an easily avoidable situation. But liablity is liability. I would say that opens too many cans of worms if life insurance companies can sue for that.
(AFAIK - never had to find out - if you drive drunk and have an accident, your insurance is on the hook for third party damages, but can then sue you to reimburse them for the loss. I did know someone who hit a tree - in front of the police station(!) - while driving drunk, and spent the next 4 years still making payments on his demolished written-off truck. It didn’t matter that he couldn’t afford a new vehicle because he lost his license too…)
It’s not at all certain that the life insurance company would have eventually had to pay out. Maybe it was term insurance and John would have switched companies in a couple of years. Maybe John would have lost his job and stopped paying premiums before he died.
The insurance company is not the wronged party here. They have an agreement with the insured to pay to the estate or designated beneficiary upon death, and as long as the death falls within the terms of coverage (many policies have clauses excluding death-by-misadventure, suicide, or other willful or negligent acts) it has to honor the contract. The insurance company has no expectation that a specific policy holder will die only after a certain time, and their actuarial analysis should include not just deaths due to old age and ‘normal’ illness but all causes including accidents, homicide, sudden or previously undiagnosed acute illness leading to death, et cetera. I think the only claim the insurance company might have is if actual fraud occurred, i.e. there was a conspiracy to murder the victim in a way that looks like an accident to get enhanced payment (literally the plot of Double Indemnity that @Mean_Mr.Mustard and I have been bantering about) or to conceal a non-covered suicide.
The victim’s family can of course sue the drunk diver or the driver’s estate because they are the wronged party which has suffered material loss due to negligence (in the case of the drunk driver, criminal negligence, which almost guarantees a preponderance of evidence of wrongdoing) to ‘recover’ compensatory and punitive damages. But they should be paid by the insurer regardless.
Stranger
If there is a subrogation clause in the life insurance policy, recovery may be possible but I doubt they could recover the full payout. The fact that the company had to pay double could open the door for them to recover the amount above the stated amount of insurance that lacking the accident, they would not have paid. They also may be tempted to go to their actuarial tables to determine their insured’s lifespan and attempt to recover lost premiums as a result of the other driver’s negligence but this latter approach is probably more of a legal strategy to increase potential settlement as opposed to an expected outcome.
The odds of never paying out - actually subtracts from any anticipated payout they would try to recover from the drunk driver for lost premiums. the life insuurance company should not be able claim the full amount of lost premiums if the actuarial tables say they had a chance of not collecting a lifetime of premiums from the insurance holder’s family anyway.
I was pointing out the absurdity of life insurance companies expecting reimbursement. They are playing the odds. They don’t give premium refunds to those who live to 107. Why should they collect because someone died at 45? It’s all accounted for in the numbers. Plus, if the could collect from the persons liable for the deaths, that should be reflected in lower premiums for all…
(If Bob is 103 and falls down the stairs, is that an “accidental death” with a double payout?)
Most likely, yes.
No. The insurance company has already been recouped their payout via their actuarial tables - they’ve spread out their risk with all of the other policyholders who have also selected an accidental death add-on.
The father of one of my elementary school classmates died when his motorcycle crashed, but he also had a heart attack. (This was decades ago.) The question was which came first, because one way would involve a bigger payout. I don’t know how it was resolved though I only know about this because my father was consulted about it.
In every US jurisdiction I’m aware of, this isn’t true. Typoically, they tender their limits without a fight.
Interesting, thanks!
AFAIK in Canada, gross violation of the DUI law means the insurance company will not pay you for causing an accident. They will however pay third parties, and then sue you to recover what they paid, if it’s worthwhile.
I vaguely recall something similar about “the commission of a crime”, I.e. if you crash while driving the getaway car during a bank robbery. Also, the onus is on the owner/insured to be reasonably sure anyone they lend the car to has a valid driver’s license.