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Alcohol Exclusion for Death Benefit Only Applies at Time of Death
Description Appeals court held that insurer must pay death benefits to beneficiaries of policy that excluded benefits if death occurred when insured was legally drunk. Insured died nine days after he caused an accident by drunk driving. While drunk when in the accident, he was not when he died.
Topic Insurance
Key Words Death Benefits, Alcohol Exclusion
C A S E   S U M M A R Y
Facts Burgess died nine days after an accident he caused by driving through a stop sign and hitting another car when his blood alcohol level was 0.12%. J.C. Penney Life refused to pay his life insurance death benefits because of the alcohol exclusion: "No benefit shall be paid for Loss of Injury that: occurs while the Covered Person's blood alcohol level is .10 percent ... or higher." Beneficiaries sued to recover the death benefits, but district court held for insurer. Beneficiaries appealed.
Decision Reversed. "When construing an insurance contract, the court must determine what a reasonable person standing in the shoes of the insured would have understood the words in the policy to mean. If the contract is unambiguous, as it is here, then the court must construe it as it stands." When Burgess died, his blood alcohol was below .10%. The loss, his death, did not occur when his blood alcohol exceeded the policy exclusion. Insurer "should have written what it meant" had it intended to exclude such incidents from recovery.
Citation Burgess v. J.C. Penney Life Insurance Co., -- F.3d -- (1999 WL 52152, 7th Cir.)
167 F.3d 1137 (7th Cir., 1999)

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