Would life insurance pay in this car crash scenario?
Would life insurance pay in this car crash scenario?
At first, it seemed to me that the policy should be paid. However, though the driver is not drunk in this situation, would he still not be at fault because he lost control of the vehicle and thus be criminally liable for the others death?
What happens in the above scenario if the passenger survives but the driver dies and this is within the first two years of the policy? Is the death ruled an unintentional suicide or something?
The reason I ask is only out of curiosity. Insurance companies are notorious for finding loopholes. I have heard that after Katrina in New Orleans that some people who had flood insurance did not receive payment because damage by broken levees was not considered the same as a flood. Since automobile accidents are so common, I am wondering how some of the specifics work.
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4 Responses
2.1.2010
Best Answer – Chosen by Voters First off…insurance companies aren't out there just to screw people. They have a contract that is clearly defined what the rules are. Secondly, property insurance is completely different from life insurance in the way claims are handled and in the way they are underwritten.To answer your questions about life insurance:Whether a policy pays out is completely dependent on what the policy states. Every company is a little different and even polices within the same company can vary depending on the date it was issues or the type of product.In most cases the driver would be eligible to collect the claim if an accident kills his/her spouse (as in your example) as long as it's not as a result of a criminal act on his part.In general, if it is a single vehicle roll over it doesn't automatically mean that there was someone criminally at fault. It could have been a defensive move to avoid wildlife, it could have been a vehicle's malfunction or just simply a mistake (IE: over shooting a turn is not criminal, it's a mistake or misjudgement). Some policies also don't deny a claim even if alchohol is a factor for the driver (again, depends on the company and when the policy was issued).If the driver dies and the passenger survives and it's within the first 2 years shouldn't have any relavence. All claims, whether within 2 years or not are subject to investigation to make sure it's valid and make sure it's not a fraudulent claim. Regarding the suicide question within 2 years, unless the passenger makes a statement claiming that the dirvers stated their intentions were clearly to commit suicide through this accident, the claim should be valid.And for the record, Katrina was a hurricane, not a flood. That is likely where the difference in whether a claim was valid or not. Strong winds would have knocked down the tree, a basement full of water would not have done that. Unfortunately, most people blame their own misunderstandings or lack of proper planning on someone else saying it was a loophole or "they screwed me", when that's not the case.Dan B: When you apply for insurance you need to be able to justify the amount applied for. Chances of a minimum wage earner getting even $1 million would be seriously pushing it unless they were the heir to a large fortune or were very young and bought the policy with the intentions of getting a better job in the future that would justify the amount. Source(s): Financial Advisor in Canada.
2.1.2010
Life insurance isn't an "at fault" situation here. Typically, as long as the policy isn't contestable, AND the survivor lives longer than the deceased by 30 days, they will collect. The type of death isn't "ruled" anything in advance – the coroner decides.The issue wasn't the broken levies not being flood – the issue was, the flood damage not being WIND. Water is flood. Houses damaged by the broken levies, NOT insured by flood insurance, wanted their HOMEOWNERS to cover the damage . Flood is excluded on the homeowners policy, whether it's broken levies or whatever.
2.1.2010
Life insurance, homeowners insurance and flood insurance are all different kinds of policies.Since they cover different things there is no comparison. Insurance companies pay what they are suppose to and pay what the policy covers.They will also not pay what the policy does not cover.
2.1.2010
And to add, if the insured amount is extremely high for the value of the insured (let's say a minimum wage earner insured for $2million), there will be an investigation, count on it. Why did the car hit the tree on the passenger's side (if that's the side the insured died on)? Skid marks? The car will be examined for possible evidence. Are the injuries commensurate with the accident (the back of the head won't get crushed in a frontal collision)? What is the debt picture of the couple? Stuff that leads to motivation for the accident.Now if the insured amount is commensurate with the value of the insured, there probably won't be an investigation at all.The only time I'm aware of time limits are for suicide and some medical insurance coverage policies. Source(s): Maybe I watch too much Forensic Files and other true crime stuff on TV.