Depending on the circumstances surrounding someone’s death, insurance may cover some wrongful death losses. The decedent’s personal representative may still need to file a wrongful death lawsuit to secure full compensation.
Learn which types of insurance cover wrongful death, the reasons an insurance provider may deny a claim, and which losses insurance may cover.
Wrongful Death Damages Often Exceed Insurance Payouts
When someone passes away due to another’s negligence, the decedent’s loved ones or personal representative may seek compensation for the associated losses. A wrongful death lawsuit may allow the deceased person’s representative to recover the following damages:
- Funeral expenses
- Burial costs
- Medical bills related to the decedent’s wrongful death
- Lost income
- Loss of love and advice
- Loss of companionship
Insurance may cover some of these losses, but carriers rarely cover the full scope of a wrongful death claim. Even when the claim is against the at-fault party’s insurance, such as a business liability insurance company, the insurance company is motivated to pay as little as possible.
Insurance Carriers May Handle Wrongful Death Differently
Understanding how different types of insurance handle wrongful death claims can help the decedent’s loved ones and dependents secure a fair settlement.
Motor Vehicle Insurance and Wrongful Death
When a person dies in a motor vehicle accident, their loved ones may file a claim with the at-fault party’s car insurance carrier. Depending on the liability coverage, the responsible party’s insurance may only cover some wrongful death expenses.
The decedent’s uninsured/underinsured motorist policy may provide additional coverage if the at-fault party’s policy is insufficient. Death benefits from an auto insurance policy may include medical expenses, lost income, and funeral and burial costs. However, if a wrongful death lawsuit succeeds, the insurance company may seek reimbursement for these benefits.
Homeowner’s Insurance and Wrongful Death
If the decedent passed due to an injury on someone else’s residential property, surviving family members may file a claim with the homeowner’s insurance for wrongful death damages. The home insurance policy documents will specify which types of damages are covered. They will also outline which circumstances are considered valid.
For instance, if the decedent tripped and fell on a loose floorboard and then passed away from their injuries, the homeowner’s insurance may cover wrongful death damages. However, if the decedent acted in a risky manner, the insurance carrier may decline to cover losses because the deceased person was responsible for their own injuries.
Business Liability Insurance and Wrongful Death
Many businesses and property owners carry liability insurance to cover personal injury and wrongful death claims. For instance, if the deceased person slipped on a wet floor in a grocery store, the decedent’s representative could file a claim with the grocery store’s insurance company.
These premises liability claims can be complicated and may require extensive negotiations. Surviving family members may still have to file a wrongful death lawsuit against the at-fault company to secure fair compensation.
Life Insurance and Wrongful Death
Life insurance beneficiaries are typically still able to recover life insurance benefits provided the decedent’s death does not fall under exclusions. Survivors should thoroughly review the life insurance policy for limitations to the policy. Common exemptions include hazardous activities, suicide, and war. For instance, if the decedent died while skydiving, the policy may not pay out to the beneficiaries.
However, if the decedent’s death does not fall under any coverage exclusions, the beneficiary should still receive the life insurance payout per the policy contract. Life insurance payouts are separate from wrongful death claims and should not be affected if the decedent’s representative files a separate wrongful death lawsuit against the at-fault party.
Health Insurance and Wrongful Death
Depending on the decedent’s policy, their health insurance coverage may pay some portion of their medical bills related to wrongful death. If there is a clear at-fault party, the insurance company may sue to recover these damages from the party responsible for the decedent’s death.
Regardless of whether health insurance covers the deceased person’s medical bills, the surviving family or representative may still have to file a wrongful death claim for the remaining damages.
Negotiating With Insurance Companies Can Be Complicated
Insurance companies operate to make a profit. When negotiating with them following a wrongful death, it is important to remember that they benefit from paying as little as possible. Claimants should consider having any settlement offers reviewed by a wrongful death attorney.
Tactics insurance companies may use in bad faith efforts to reduce a wrongful death payout include:
- Offering a lowball settlement
- Rushing the claimant into accepting a low settlement
- Denying a valid claim
- Delaying a valid claim
- Harassing or otherwise disturbing the claimant
Even when acting in good faith, insurance companies often require extensive evidence and documentation to prove the claim falls under the policy contract. They may require photos, videos, or witness statements to establish fault and causality. Other evidence they could request includes medical records, medical expert statements, medical bills, pay stubs, and financial statements.
Not All Claimants Can Receive Payouts From Insurance or Wrongful Death Claims
Insurance policies often have named beneficiaries to receive claim payouts or settlements. Someone who files an insurance claim for wrongful death damages may not be eligible to receive a payout. In such cases, the claim may be denied altogether or the insurance company may pay the settlement to the decedent’s estate to be disbursed according to their will and appropriate laws.
Similarly, wrongful death lawsuits are typically only brought on behalf of the decedent’s immediate family, dependents, personal representative, or executor. State laws differ when it comes to determining who can file a wrongful death lawsuit. In addition, not all people who can file a wrongful death claim can receive a settlement.
A wrongful death attorney familiar with state laws and insurance claims can help the deceased person’s family or personal representative navigate the process. A firm with experience handling wrongful death suits can also provide insight into the types of damages an insurance policy may cover while assisting with negotiations and filing a wrongful death lawsuit.
