Disability Policies – Illness Versus Accident

Someone is Burleson, Granbury, Cleburne, Bembrook, Crowley, Dallas, Fort Worth, Grand Prairie, Arlington, or any other place in Texas who has a disability insurance policy probably is not sure exactly how the policy works. Most people who have these types of policies get them through their job. When obtained through work the person usually gets a pamplet explaining some of the benefits but rarely is much attention paid to it. A few people will purchase them through an independent insurance agent who explains the coverage but even then, the explanation is quickly forgotten or not completely understood.
The Beaumont Court of Appeals decided a case in 1978, dealing with an insurance policy. The policy had different periods of disability that applied depending on whether the disability resulted from an accident or an illness. The style of the case is, Lone Star Life Insurance Company v. Joseph B. Griffin.
At the trial level, Griffin obtained a judgment against Lone Star Life Insurance Company (Lone Star). Lone Star appealed.
The facts in this case were as follows:
Griffin testified that on the night of February 2, 1975, as he was returning to his home from his farm, he passed his drugstore. As was his custom, he entered the store to see if everything was normal (having been burglarized several times in the past). He smelled smoke which he found to be coming from the rear of his building. He testified that he emptied his fire extinguisher but his efforts were futile; that he was trying to get out of the building when an aerosol can exploded in his face; that he lost consciousness while upon the floor of the store near a door, and regained consciousness later in a hospital.
Dr. Lee Popejoy testified as to his treatment of Griffin beginning at about two in the morning following the fire. He told of finding external burns on several parts of Griffin’s body but the most serious injury was to his lungs from the inhalation of smoke and fumes.
Griffin operated a one-pharmacist store and he secured the services of a retired pharmacist to help him for a while. He testified that he was unable to do the work of a pharmacist because of his difficulty in breathing and that while his health had improved, he was still unable to do his work in the store.
Dr. Popejoy testified positively and unequivocally that Griffin’s injuries were caused by the inhalation of the smoke and fumes which resulted in his total and permanent disability. Dr. Charles Anderson examined Griffin for Lone Star. His examination was more than two years after the accident and he found Griffin to be only partially disabled, at the worst. Anderson attributed Griffin’s condition to his constant smoking of cigarettes which he admitted to have been addicted to for approximately fifty years. Anderson testified that Griffin could do all of the work of a pharmacist but could not do any sustained heavy lifting.
The policy of insurance provided that Lone Star would pay Griffin $1,000 per month for sixty months for an accidental injury resulting in total disability and that it would pay $1,000 per month for twenty-four months for total disability resulting from sickness. Lone Star paid several monthly payments of $1,000, noting on each check that the payment was for accidental injuries. Without any change in its medical information in its file and for some undisclosed reason the checks were coded to indicate that the disability was the result of sickness, not an accident. The twenty-fourth payment was coded to indicate a sickness disability payment and a letter was written. The check indicated it was the last payment.
The letter said, “If we can be of further assistance to you, please do not hesitate to contact us.”
Griffin alleged and contended that Lone Star, by sending the letter, “repudiated the provisions of its policy dealing with payment of benefits for disability resulting from accident” so as to entitle him to recover not only the past due payments but “also the present cash value of the future payments which are unaccrued.”
The jury found in Griffin’s favor.
There are two relevant points in this case:
1) to point out that disability policies have various provisions written in them and understanding this is important to understanding your rights in a policy when making a claim for benefits, and 2) when, as here, there are two time periods of payment that may be applicable, that alleging and proving a repudiation of the insurance policy may allow the insured to recover future benefits immediately, subject to a reduction for present value.
A third lesson would be, consult with an experienced Insurance Law Attorney whenever you find yourself in a position of being denied benefits under a disability insurance policy.