The effects of alcohol and marijuana may be well-known, but they present a less understood side effect for the insurance industry. Although a claim involving one or both substances could seem straightforward, far too often carriers encounter complications during the process. The solution tends to veer from black-and-white into gray.
Case in point
Consider this true scenario. A policyholder drowned while kayaking in rough waters and was found three days later. The blood alcohol concentration (BAC) measured 0.12%, well above the national limit of 0.08%. Believing this contributed to the accident, the carrier denied the claim. Yet what seemed like a simple closed case morphed into one far more complex.
The beneficiary argued it was decomposition that led to the heightened BAC level. Indeed, photos of the death scene and the autopsy showed noticeable body decomposition. Research indicates that high blood alcohol levels may develop during decay of organic material and that a level as high as 0.2% does not necessarily indicate alcohol was consumed before death.
Also, blood alcohol levels during an autopsy are valid for up to 48 hours, assuming proper protocols are observed. Because the insured was discovered after 72 hours and the decomposition process was under way, the BAC was found to be inconclusive and the denial was overturned on appeal.
Alcohol vs. marijuana
The impact of alcohol on life and accidental death and dismemberment (AD&D) claims is more defined than that of marijuana. Alcohol has been legal in the U.S. since 1933 (post-prohibition), nearly as long as marijuana has been federally illegal (since 1937). This creates some stark differences between the two substances:
- Alcohol laws are consistent nationwide, as is a federally recognized intoxication level (0.08% BAC). The same does not hold true for marijuana. Regulations vary by state, and there is no standard intoxication level.
- Alcohol has an established testing protocol to determine impairment – blood alcohol concentration; marijuana does not. The level of tetrahydrocannabinol (THC), the active ingredient in cannabis, does not necessarily equate to impairment.
- A history of alcohol use does not affect the current BAC; the opposite is true for marijuana, where prior use can affect current THC levels.
- Alcohol’s metabolic process is understood, and the effects are predictable. In contrast, the metabolism process for marijuana is more complex and its effects are unpredictable. For example, THC can be stored in body fat for up to 28 days.
Regulations for marijuana are still under development, and it could be years before there is national clarity matching what exists for alcohol.
See also: Why Are So Many Dying on U.S. Roads?
Challenges with alcohol and marijuana claims
AD&D benefits tend to be approved when the loss is the direct and sole result of an accident with no contributing causes, such as alcohol or marijuana. Still, the industry faces a few obstacles that complicate the process.
Unclear policy language
Ambiguous policy language creates confusion for claim handling. The absence of clear language can lead to inconsistent decisions, and appeals can go in the claimant’s favor.
Inconsistent practices
Carriers across the industry have varying approaches to risk management. While some insurers strictly adhere to policy language, others may demonstrate flexibility. Even the number of resources used for claims differs by carrier.
Lack of direction
The claim evaluation process can be riddled with ambiguity, making the decision less straightforward. Vague policy language can contribute to uncertain claim direction.
Lack of understanding
Most policyholders and beneficiaries lack a true comprehension of policy provisions and claim processes, especially where exclusions apply.
Different state, different law
Unlike alcohol, no federal standards for marijuana exist. Depending on the state, cannabis can be illegal, legal for medical use, or legal recreationally.
Documentation is key
Obtaining the proper documentation is critical for reaching an accurate decision. Examples of records to consider include:
- Policy language
- Death certificate
- Coroner or medical examiner report
- Toxicology report
- Police report
The latter three can help determine policy exclusions for factors such as being under the influence.
Classifying marijuana
Because marijuana has been illegal in the U.S. for nearly 90 years, minimal medical science exists. Merely classifying marijuana presents a challenge. Because THC can cause multiple reactions to the central nervous system – excitement, impairment, depression – it does not fit into one drug category.
The Drug Enforcement Administration (DEA) has proposed reclassifying marijuana from a Schedule I drug – those without an accepted medical use and a high potential for abuse (e.g., heroin, LSD) – to a less regulated Schedule III drug (e.g., ketamine). If the change is made, it could create an avenue for expanded testing and established standards for law enforcement and the insurance industry. The road to reclassification is likely to be lengthy.
See also: Behavioral Science and Life Insurance
The state of marijuana
Because the legality of marijuana varies, claim decisions involving it require familiarity with the laws for the state in which the insured resided at the time of death.
Every state has laws addressing alcohol-impaired driving and drug-impaired driving, but the latter are more complex and difficult to enforce and vary substantially by state. One of two laws tends to apply when considering drug-impaired driving:
- Zero tolerance: It is illegal to drive with any measurable level of specified drugs in the body.
- Per se: It is illegal to drive with a level of specified drugs in the body that exceeds certain limits.
Conclusion
Alcohol- and marijuana-related claims exemplify the challenges inherent in claims adjudication. The complexities, especially for marijuana, create a significant challenge for carriers evaluating a claim’s validity.
Solid risk management protocols require a more detailed review of policy language, documentation, and state laws.
The impact of alcohol on claims is largely clear, but marijuana regulations vary by state and will continue to change. Insurers should consider broadening their exclusion language to address the use of marijuana and other drugs.
This is an ever-evolving process. The experts at RGA will continue to monitor its progress and provide future updates on alcohol, marijuana, and their complex impact on life and AD&D claims.
