If you’re from the state of Oklahoma then you’ve probably heard the name Aubrey McClendon pass through a few or a lot of lips in passing conversation. After all, he was the leader of Chesapeake Energy which was, in its heyday, the 2nd largest U.S. natural gas producer. At his time of death, McClendon was the CEO of American Energy Partners. As if all of that is not notable enough, the man was also part owner of the Oklahoma City Thunder with an estimated net worth $500 million. The day before his fatal incident, a federal grand jury in downtown OKC handed up the indictment for conspiring to rig bids for oil and natural gas leases. His death was not just the front page for state news, but national and it’s a huge loss for our state.
The initial investigation reports emerged yesterday for the fatal car accident that occurred on March 2nd in which McClendon’s car slammed into a bridge going more than 75 mph. Fault has yet to be determined. When I was first alerted about this, I was immediately curious on how the insurance would respond. I knew immediately that the decision on whether the crash was intentional or not would impact the insurance payout in some respects. The reason for this is that many policies have written in the policy form that specifically excludes purposeful intent. In layman’s terms, if he purposefully crashed the car, there may not be coverage in some areas. The key to everything is that the insurance company would have to prove that it was in fact intentional; prove that there was intent to crash the vehicle. Prove that he had planned it and that in itself could be hard to do. If you’re familiar with liability, then the payout for liability coverage is going to be for third parties for either bodily injury or property damage. In this case, the bridge would have been the third party. In the event of an accident, his liability would pay for the property damage to the bridge. In the event of the wreck being deemed intentional, it’s going to depend on the policy form and how it reads on whether it would pay or not. Liability is there for human error; the type of situation when you think your car is in reverse and accidentally plow through the garage door. Its intended purpose is for negligence in a situation and can sometimes have exclusions when it comes to intentional acts.
The next coverage that they may or may not use would be physical damage to the car itself. With a net worth of $500 million, one could assume he also had comp and collision. This would pay for damage to his vehicle or to replace it after it was burned. Comp and collision will pay even in an incident where you’ve caused the damage yourself so coverage may be there. Think of when the car runs through the garage door and insurance still pays to repair it. In a situation like this, it would depend on the policy and whether they have exclusions.
When it comes to life insurance or accidental death and dismemberment, it will usually depend on when the policy was put in place. Life insurance is going to pay an amount to the loved ones left behind. It could be hundreds of thousands or it could be millions. Life insurance is fairly common while death and dismemberment is a little less heard of. An AD&D policy is limited form of life insurance. It can be written stand alone but it is also written into a large majority of life insurance policies. It's triggered when the death of an insured is caused by and accident or dismemberment (the people who named it were very black and white.) Most life insurance policies have something called a suicide clause that states if suicide occurs within the first two years of the policy that no death benefit will be paid. Again, the insurance company will have to prove that it was intentional. In this case, there is no note, tests show that he did in fact hit the brakes, no matter how minor it may have been. Fault could be hard to place. If fault could not be placed or it’s been over two years then the death benefit will most likely be paid.
Every policy is different with every company. The rules for one company may not be the same as it is for another. It’s important to know what you’re insured for and maybe more so for what you’re not.
Our thoughts and prayers go out the family, friends of Aubrey McClendon during this time.