ALCOHOL EXCLUSION IN LIFE INSURANCE POLICY APPLIED AS WRITTEN BY FIFTH CIRCUIT

July 30, 2012

In a case of first impression recently released, the Fifth Circuit considered a life insurance policy for accidental death benefits that excluded injuries “sustained as a result of being legally intoxicated from the use of alcohol.”  Likens v. Hartford Life and Acc. Ins. Co., --- F.3d ----, 2012 WL 2926966 (5th Cir. July 19, 2012).  The insurer had denied the claim based on the exclusion and the beneficiary sued for breach of contract.  The Fifth Circuit rejected the beneficiary’s argument that the exclusion was ambiguous.  The Fifth Circuit briefly reviewed other decisions that addressed similar exclusions before turning to the Texas Penal Code for the standard for legal intoxication. The Fifth Circuit reasoned that the insured was intoxicated at the time of the injuries leading to his death because Texas defines legally intoxicated at 0.08 blood alcohol level and the insured’s was 0.262.  The Fifth Circuit considered the death certificate which noted that the death was accidental but also documented that the intoxication was a contributing factor.