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What Is Double Indemnity in a Personal Injury Case in 2023?

Posted in Personal Injury on August 2, 2023

Double indemnity is a type of clause often found in life insurance policies. It is a provision that allows a claimant to recover additional money – generally, a double payout – in the event of an accidental death. Unfortunately, insurance companies often prevent clients from receiving the financial recovery they deserve through double indemnity clauses, such as by making it hard to prove that a death was accidental. You may need help with double indemnity from a personal injury lawyer.

What Is Double Indemnity?

Double indemnity refers to a life insurance policy provision that allows claimants to receive larger payouts if the insured individual died as a result of an accident or unintentional injuries. In most cases, double indemnity allows for double or even triple payouts. A death may be classified as accidental for insurance purposes if it stems from any of the following circumstances:

  • Act of violence/homicide
  • Car or truck accident
  • Choking or suffocation
  • Defective product or machinery incident
  • Drowning
  • Exposure to toxic substances
  • Medical malpractice
  • Slip and fall accident
  • Workplace incident

Obtaining benefits through a double indemnity clause generally requires proof that the death was accidental. This may take evidence such as a police report, a coroner’s report, expert witness testimony and medical records. You and your family may also have to go up against the insurance company with a lawsuit to obtain the financial compensation you deserve through a double indemnity clause.

While your insurance company may try to argue over the accidental nature of a death, most policies will have some clear exclusions. Double indemnity normally does not cover any of the following:

  • Suicide,
  • Heart disease,
  • Cancer,
  • Long-term illness or disability,
  • Negligence of the insured, and
  • Murder caused or conspired to by a beneficiary of the policy.

If the cause of your loved one’s death is unknown or undetermined, the insurer is not yet required to pay the claim. However, once the majority of evidence shows the insured died of accidental causes, then the insurance company will need to pay.

Double Indemnity in a Personal Injury Case in 2023

How Does Double Indemnity Insurance Work?

Double Indemnity Clause

To clarify, a double indemnity clause is language within an insurance policy specifying that double indemnity applies to the contract. This means that if an insurance policy includes a double indemnity clause, the insurer must pay at least double the limits of the policy upon the accidental death of the insured party. Some double indemnity policies require insurers to pay three or more times the policy limit upon the insured’s accidental death.

Accidental Death 

A unique feature of double indemnity is that the insured’s death must be accidental for the insurance company to pay the claim. In the United States, accidental death is the fourth leading cause of death. However, only 5% of all deaths each year are accidental. Hundreds of thousands more people die of heart disease and cancer. Because of this relatively low incidence of accidental death, insurance companies rarely have to pay out double indemnity claims.

Double indemnity policies can be an integral part of a wrongful death lawsuit. The evidence used to prove accidental death for the claim may also be used in the lawsuit. If you are facing the challenge of navigating both a wrongful death lawsuit and a double indemnity insurance policy, speak with experienced legal counsel right away. Our team at The Law Office of Aaron Herbert can help you.

What Issues Might You Encounter With a Double Indemnity Clause?

It is important to realize that the insurance company receiving your claim does not want to maximize your payout. It wants to pay you as little as possible to protect its own profits. The insurance company can come up with many reasons to deny a double indemnity clause. One of the most common excuses is that the death was not accidental. It may be up to you or your personal injury attorney to prove that it was accidental and that you qualify for double indemnity under the insurance policy. Another excuse insurance companies often give is that the death qualifies as a policy exception. Read the fine print of your life insurance policy to understand the exceptions to your double indemnity clause. Common exceptions are deaths caused by suicide, the decedent’s own negligence or intoxication, natural causes, and murder by one of the beneficiaries listed on the policy. Finally, your double indemnity clause may be denied if the insurance company is guilty of bad faith. Insurance bad faith is the rejection of benefits or diminishment of a client’s payout without a valid reason. An insurance company may be guilty of bad faith if it knowingly or intentionally mishandles your claim to protect its own profits. If you suspect insurance bad faith, contact an attorney for assistance with a separate bad-faith claim.

What Should You Do If Your Insurance Company Denies Your Claim?

Outright Denials of a Double Indemnity Claim

Even when it is clear that a death was accidental, as in the case of a well-documented motor vehicle accident, insurance companies often try to avoid paying claims. However, you can dispute the denial of a double indemnity claim. Your policy may explain the dispute process, and an experienced lawyer can help.

When the insurance company denies a claim, the burden is on you to challenge the denial. Sometimes, you can challenge the denial of double indemnity with further evidence of accidental death. Sometimes, a resolution can be negotiated out-of-court in a settlement. Speak with a knowledgeable wrongful death attorney to understand your rights.

Bad Faith Denials of Double Indemnity Claims

In cases where a death certificate lists an undetermined or ambiguous cause of death, an insurance company may deny a double indemnity insurance claim before waiting for all the evidence. If a reasonable insurance company would have honored the claim, you may have a claim against the insurance company for bad faith.

Indications that your insurance company is acting in bad faith include:

  • Claim denials without explanation or with no reasonable explanation,
  • Unusual or unnecessary delays in processing claims and communications, and
  • Unreasonably low offer to settle your claim.

Even if your insurance company makes you an offer to settle, you are under no obligation to accept it.

Why You Should Hire a Lawyer to Handle Double Indemnity Claims

When you are seeking double indemnity after a loved one’s death, having an attorney to guide you through the claims process can be an invaluable resource. An experienced wrongful death attorney should be prepared to fight all the way to court for you against an insurance company that denies rightful payment of accidental death claims. With knowledgeable legal representation, you can improve your chances of receiving the double indemnity compensation you are owed after a devastating accidental death.

How to Handle Your Life Insurance Claim

If you are filing a claim to recover benefits under a double indemnity clause, be careful what you say to the representative in charge. Remember, the insurance company does not have your family’s best interests in mind. Before you accept a life insurance settlement, bring the offer to a personal injury lawyer to confirm that it is a fair and full amount. A lawyer can help you negotiate with the insurance company for a fair payout or appeal a denied claim, if applicable.
If your loved one recently passed away under unexpected or preventable circumstances, consult with a wrongful death attorney about your family’s legal rights. An attorney can guide you through a double indemnity clause in your loved one’s life insurance policy and/or represent you during a wrongful death lawsuit in Dallas. An attorney can also help you with an insurance bad-faith claim if your double indemnity clause is wrongfully denied. Learn more today by contacting The Law Firm of Aaron A. Herbert, P.C.