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Alcohol Exclusions in AD&D Policies Differ State to State When “Law of the Locale” Applies

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Accident, death, and dismemberment insurance policies often contain exclusions which prevent recovery under specific circumstances. Sometimes those circumstances must be examined under the “law of the locale” where the event took place. Unfortunately, there may be a conflict about what this means.

A common exclusion relates to intoxication and this was the issue in Cultrona v. Nationwide Life Ins. Co., 748 F.3d 698 (6th Cir. 2014). The policy stated that the surviving spouse could not recover if her husband was “deemed and presumed, under the law of the locale in which the Injury [was] sustained, to be under the influence of alcohol or intoxicating liquors.” Usually, this type of AD&D insurance clause comes into effect when injury or death is the result of driving while intoxicated. In this case, however, the deceased was found dead on the bathroom floor of his own home in Twinsburg, Ohio.

The insurance company denied the claim. Ohio state law provides that the “cause of death and the manner and mode in which the death occurred … in the coroner’s verdict and in the death certificate … shall be the legally accepted manner and mode in which such death occurred.” The coroner had, in fact, found that the manner of death was “[a]cute ethanol intoxication.”

The surviving spouse argued that the “law of the locale” under her AD&D insurance policy should mean the law of the town in which the death took place. Since Twinsburg had no ordinance equivalent to the state law and the decedent had not been driving while intoxicated when he died, she believed that her claim should be paid. She was able to point to some cases where “law of the locale” was interpreted to mean city or county law. However, the appellate court disagreed, finding that “the bulk of authority supports the opposite conclusion-that the phrase ‘law of the locale’ means state law.” Denial of the claim was affirmed.

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