Life License Qualification Program (LLQP) Practice Exam

If an individual is involved in an accident while intoxicated, who is financially responsible for medical bills according to the policy's exclusion?

1. The reinsurer

2. The insured

3. The insurer

4. The Guaranty Association

The correct answer is: The insured

In cases where an individual involved in an accident is intoxicated, many insurance policies contain exclusions that stipulate that the insurer will not cover claims related to injuries incurred while under the influence of alcohol or drugs. This exclusion means that the insured individual is typically held financially responsible for their medical bills in such scenarios. Insurance policies are designed to manage risk; therefore, when an individual engages in behavior that significantly increases the likelihood of an accident—such as operating a vehicle while intoxicated—insurers frequently exclude coverage for resulting claims. This serves to uphold the principle of personal responsibility and discourages reckless behavior that could lead to harm. The reinsurer, insurer, and guaranty association do not bear financial responsibility in this situation because the policy's exclusions specifically remove coverage for claims arising from activities deemed high-risk when the insured is intoxicated. Consequently, the responsibility reverts to the individual directly involved in the incident.