Accident Policies – AD&D

Accidental death policies pay your beneficiary if you die in an accident. They can be part of your group insurance benefits or a benefit under a private policy. These policies also pay a benefit if an accident causes the loss or loss of use of an important body part or function. This article looks at accidental death and dismemberment and loss of use claims.

Accidental Death and Dismemberment and Loss of Use Claims

Sample Policy Language:

The language referred to below is the Accidental Death, Dismemberment and Specific Loss Benefit Rider published on the Canada Life website. It’s important to recognize that as these disputes are contract claims, you need to review your own contract. However, this language is used to illustrate some typical language and the disputes over their application to a claim for benefits.

Covered Accidental Death, Dismemberment and Specific Loss Benefits:

Covered Loss means a specific loss set out in Section 3 that:

• Occurs as a direct result of the injury, independent of all other causes;

• Occurs within 365 days after the date on which the injury is sustained; and

• In the case of loss of use, is continuous for 365 days after the date on which the injury is sustained.

Loss by Dismemberment means:

• For hands and fee, complete severance through or above the wrist or ankle joints;

• For arms and legs, complete severance through or above the elbow or knee joints;

• For thumb and big toe, complete severance of one entire phalange; and

• For fingers and other toes, complete severance of two entire phalanges.

Loss of Use means:

Loss of Sight, Speech, or Hearing means total and irrecoverable loss beyond correction by surgical or other means.

Loss of Use means total and irrecoverable loss of the ability to perform each and every action the arm, leg, or hand was able to perform before the date the Injury was sustained beyond correction by surgical or other means.

The policy will provide that a benefit is paid based on the loss suffered with a specific amount being attributed to each loss.

AD&D – Disputed Claims:

Three principal areas of dispute in AD&D claims are:

1. Did the loss occur as a result of an accident?

1. Is the claim excluded by any term of the policy?

1. Has there been a loss of use that is total and irrecoverable?

The third area will be covered by this article – accidental death and dismemberment and loss of use.

What does total and irrecoverable loss of use mean?

The reason for the disputes in these types of claims is, as is often the case, illustrated best with sample fact situations. If the insured retains some residual function, the insurer may conclude that there has not been a total loss of use. Further, if the insured has seen some increase in function in the year following an accident, the insurer may take the position that the loss of use recoverable. To the insured, the fact that they retain some residual function may seem like the insurer is “splitting hairs” when the loss of function has been life changing and catastrophic.

Leonard v. Mutual Life – Ontario, 2002

There is little case law in the area although Leonard v. Mutual Life shows what courts have been willing to do at trial where the case involves loss of use. Mr. Leonard sued Mutual Life under his accidental death and dismemberment policy for loss of use of his legs. The policy covered “paraplegia” which was defined in the policy as “the loss of use of both lower limbs”. Loss of use was defined as “the entire and irrecoverable loss of use beyond remedy by surgical or other means”.

Mr. Leonard was diagnosed with paraplegia after he fell 22 feet from a steel beam landing on a concrete floor and sustaining a crushing fracture to his spine. The court noted that Mr. Leonard could:

“drive an automobile, shovel snow, cut the grass, do vacuuming and home maintenance, unload a wheelchair and carry it, take photographs while walking and so on.”

The court then went on to find that because Mr. Leonard had “no feeling at all from the knees down; and no bladder, bowel or sexual sensation” and:

“Through his own extraordinary initiative, discipline and rehabilitative efforts, he has progressed to the point where he can move his legs using certain muscles in his lower abdomen and hips. In doing so, he uses his legs almost as stilts; that is, as though they were prostheses.”

The court found in favour of Mr. Leonard, noting that he had “lost the use of both of his lower limbs within the meaning of the policy”.

Loss of use examples

A dispute can arise where an insured is capable of walking with a walker but cannot walk unassisted. The insurer will say that being able to stand and walk with the assistance of a walker means that the loss of use has not be total and irrecoverable. The insured may see the fact that they will never walk without the use of the walker is a total and irrecoverable loss of the use of their legs.

A dispute over loss of use of speech could arise where the insured is able to whisper with difficulty. The person cannot project their voice well enough to be heard in a social or work setting. The insurer will argue that because the injured person can make themselves heard with great effort in a quiet room and in a one-on-one conversation, there has not been a total and irrecoverable loss of use.

Loss of use claim disputes may also arise in the context of presumptive disability where disability is presumed as a result of the loss of use of a body part or function.

Conclusion:

Accidental death and dismemberment and loss of use are complex claims. It is important to seek legal advice from a lawyer who has experience dealing with these claims. Most of these cases are resolved before a court makes a determination at a trial of whether the claim for benefits is payable.  We know how to assess whether the insurer’s decision can be challenged and how to approach proving your claim.

For advice, please text 613-777-0992 or contact us to schedule a meeting with one of our lawyers.  We will provide a free consultation, in French or English, to ensure that your rights are protected.   In most cases, we can offer to represent you on a contingency fee basis.  This means that you do not pay legal fees unless you win or achieve a settlement on your case.

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