Cuyamaca College Insurance Company or Toms Estate Business Jury Case Study

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Business Finance

Cuyamaca College

Description

THE CASE OF THE DRIVER WHO HAD ONE TOO MANY

Tom was insured under a life insurance contract policy that excluded death due to suicide. The policy had a face amount of $1 million. Two weeks after taking out the policy, Tom stopped at a local bar to have a “few” as he had gotten a promotion that day and his family was depending on that promotion to save their home. Tom left the bar, driving while intoxicated. He was speeding and lost control of his car which hit a utility pole. He was killed immediately. There was no one else involved in the accident. The weather was clear and the road was in good shape and well lighted. Tom’s insurance company refused to pay and Tom’s wife sued the company to force payment.

The Trial

Testimony at the trial proved conclusively that Tom was legally intoxicated when he left the party. There was also proof that there was nothing in the policy about lack of coverage in the event of an accident due to intoxication.

The Arguments at Trial

The insurance company’s attorneys argued that benefit provisions apply only to death due to accidents and that, although Tom appeared to have been in an accident, his death was due to his being intoxicated and therefore not an accident. They further argued that this concept was so logical that it did not need spelling out in the insurance policy. The estate’s attorneys argued that because the policy was silent about accidents due to intoxication, the benefit provision should apply regardless of the cause of the accident; the parties had a contract and all exclusions must be spelled out in the contract in order to be effective.

Questions to Discuss

  1. Who do you think has the stronger argument, the insurance company or Tom’s estate? Why?
  2. If you were the jury hearing this case, how would you decide? Why?
  3. What do you think the rule regarding coverage of accidents due to use of drugs or excessive alcohol should be?

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Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

Running Head: CASE OF A DRIVER

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Case of a driver
Student’s Name
University Affiliation

CASE OF A DRIVER

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Case of a driver

Tom's estate has the most potent argument, in my opinion. Tom was insured in a life
insurance Company that indicated that they would not insure or pay claims to any person who
died by committing suicide. An insurance company generally enters into a contract to pay the
insured upon the occurrence of an event, which in our case is death. Tom's death occurred
through accident, and it was not out of his desire to die. His death occurred when he was
drunk, and this does not mean he got drunk to die. They had not indicated in their policies if
death occurred due to excessive alcohol consumption, what will be the outcome.
If I were the jury hearing this case, I would rule that the life insurance company
should compensate tom. When they offered the contract, nowhere was it shown that they
would not compensate except for death through suicide. As a professional body, the
insurance company's work is to make their clients understand their products well without any
confusion. In case anything is not well understood, they will be held liable because they are
the experts, and they understand what they mean well. Therefore, life insurance should
compensate tom's wife.
Coverage due to accidents due to the usage of drugs should be considered as an
accident. This is because some people only function well under the influence of drugs.
However, they reduce their life span. What insurance companies do is charge them high
premiums compared to those who do not use drugs. It should also be written well under the
conditions of each ...


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