Court Affirms Denial of Accidental Benefits for Diabetic

December 20, 2007 ( - The U.S. District Court for the Eastern District of Pennsylvania has agreed with an insurance company's decision to deny accidental death benefits for a participant who died of injuries from a car accident that was likely caused by his severe hypoglycemia.

In granting summary judgment to Life Insurance Corporation of North America (LINA), the court concluded that “a reasonable fact-finder could not find that LINA’s decision to deny plaintiff’s claim for accidental death benefits was unreasonable, unsupported by the evidence, erroneous as a matter of law, nor was it irrational, arbitrary, or capricious.” LINA determined that Dennis Nally’s diabetes-related hypoglycemia caused his accident.

Mr. Nally was involved in a high-speed, single-car rollover accident, and later died in the hospital as a result of his injuries. Witnesses reported he was driving at a high speed, “all over the road,” crossing the center lane on occasion, according to the court document. When paramedics arrived at the scene and extracted Mr. Nally from his car, they discovered during their assessment that his blood sugar was at a dangerously low level and he was in a hypoglycemic coma.

The accidental death policy in which Mr. Nally was enrolled and for which Ms. Nally was the beneficiary stated: “[I]n addition to any benefit specific exclusions, benefits will not be paid for any Covered Injury or Covered Loss which, directly or indirectly, in whole or in part, is caused by or results from … sickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or surgical treatment thereof . . . .” After reviewing medical and police records both with the first claim for benefits and after Ms. Nally’s appeal of its first decision, LINA denied payment of benefits.

Plaintiff Vicky Nally had suggested a host of alternative reasons for her husband’s speeding, erratic driving, and accident as reported by witnesses, including possible side-effects of medication, recklessness, falling asleep, inadvertence, or “dozens of other possible explanations.” However, the court said Ms. Nally did not present any evidence of record either to prove the reasonableness of these alternatives, or to rebut LINA’s finding that Mr. Nally’s accident was caused by hypoglycemia.

In addition, Ms. Nally argued that the evidence of record does not establish the veracity of LINA’s conclusion with absolute certainty.  However, the court said that degree of certainty is not required to show reasonableness under the heightened form of the arbitrary and capricious standard.

Citing the 3 rd U.S. Circuit Court of Appeals which previously ruled, “[I]f the policy contains an additional clause precluding recovery if the death was caused directly or indirectly by disease, there can be no recovery if pre-existing disease contributed to the death,” the District Court concurred with LINA’s position.

The opinion in Nally v. Life Insurance Corporation of North America, et. al. is here .