Georgia Disability Insurance Law — Total Helplessness Not Required

Some insurance companies try to argue that one must be completely helpless to qualify for disability insurance benefits. However, Georgia law does not require total helplessness, or a strict and literal interpretation to total disability income policies. Instead, Georgia employs a reasonable interpretation in light of the insured’s customary occupation, experience, education, and physical and mental capabilities.

In Parker v. Prudential Insurance Company of America, 224 Ga.App. 865, 482 S.E.2d 483 (1997), the Georgia Court of Appeals reversed summary judgment for a disability insurance carrier. Due to psychiatric illness, an accountant was able to earn only 20% of what he had previously earned in an executive position. Even under a non-occupational disability policy, the Court held:

[D]isability exists if the condition of the insured prevents him from performing a substantial portion of the duties of his occupation or such other line of work as he might reasonably be expected to follow, considering his education, experience, age, and natural ability. . . . [T]otal disability is properly considered within the context of the insured’s customary and usual vocation. . . . “[T]otal disability” requires only that the insured be unable to perform substantial portions of his ordinary employment or any other employment approximating the same livelihood as he might fairly be expected to follow, given his personal circumstances, including his experience, education, and physical and mental capabilities.

Likewise, in Equicor, Inc. v. Stamey, 216 Ga.App. 375, 454 S.E.2d 550 (1995), a motorcycle policeman who had degrees in fields in which he had no work experience the court rejected the insurer’s denial of disability benefits, reasoning that:

[D]isability exists if the condition of the insured prevents him from performing a substantial portion of the duties of his occupation or such other line of work as he might reasonably be expected to follow, considering his education, experience, age, and natural ability. . . . [T]otal disability is properly considered within the context of the insured’s customary and usual vocation.” . . . “[T]otal disability” requires only that the insured be unable to perform substantial portions of his ordinary employment or any other employment approximating the same livelihood as he might fairly be expected to follow, given his personal circumstances, including his experience, education, and physical and mental capabilities. (Emphasis supplied)

Even earlier cases sometimes selectively quoted by disability insurance companies support this proposition. In Cato v. Aetna Life Ins. Co., 164 Ga. 392(3), 138 S.E. 787 (1927), the court stated:

When the insured is incapacitated from performing any substantial part of his ordinary duties, a case of total disability is presented, although he is still able to perform some parts of his work. Total disability is inability to do substantially all of the material acts necessary to the transaction of the insured’s occupation, in substantially his customary and usual manner. . . . Total disability does not mean absolute physical inability to work at one’s occupation, or to pursue any occupation for wages or gain. . . . 138 S.E. at 788.(emp. supplied)

Similarly, in Prudential Ins. Co. of America v. South, 179 Ga. 653, 177 S.E. 499 (1934),the court held:

[T]he policy should be construed liberally to effectuate the general purpose of the contract, which is to indemnify the insured for the loss of time by reason of incapacity to perform his usual work or carry on his usual business by reason of a happening covered by the policy. . . . There are two lines of authority relating to cases of this kind, one tending to literalism, and the other applying the principle of liberal construction. The authorities which incline to strict interpretation are seemingly in the minority, and this court is committed to the more liberal doctrine. . . . Where a provision in a policy is susceptible of two or more constructions, the courts will adopt that construction which is most favorable to the insured. . . . . Under this policy, any reasonable person would have expected substantial protection, and would never have thought of the disability as one which must incapacitate him to earn the smallest sum in any possible manner. . . . “Total disability,” irrespective of the technical variations in the language employed, should be given a rational and practical construction. . . .We are unwilling to adopt . . . a doctrine, the effect of which would be . . . to reduce all such contracts to nullities, and to make them the instruments of extracting dues from policy holders without creating any liability on the part of the insurers. . . . Under defendant’s theory, the plaintiff might embark in the peanut trade or follow the business of selling shoestrings or lead pencils, or follow some similar calling . . . . [S]uch was not within the contemplation of the parties. In order to carry out the intent of the parties, it is our duty to disregard the broad language used which would have the effect to defeat the purpose of the contract and render it a nullity. (emphasis supplied)

Likewise, in Metropolitan Life Ins. Co. v. Johnson, 194 Ga. 138, 20 S.E.2d 761 (1942), the court held for the insured, a TB victim who was unable to continue operating his store but managed the Elks Club. He was “not performing any substantial part of the duties of his former employment or duties of a similar nature, and cannot be deprived of total disability benefits by reason thereof.” 20 S.E.2d at 762.