Auto Insurer Argues Drunk Driving Accidents Not Covered Under Liability Policy: 5th Circuit Disagrees

Carlos Sanchez got drunk and crashed into Richard Frederking while driving his employer’s vehicle insured by Cincinnati Insurance Company. Seriously injured, Frederking sued Sanchez in Texas state court and was awarded $137,025 in compensatory damages and $207,550 in punitive damages.

Cincinnati agreed to pay the compensatory damages owed by the employer, but refused to pay the punitive damages owed by Sanchez, arguing that drunk driving collisions are not “accidents” under their liability policy, because the decision to drink (and then later drive) is intentional—even though there IS admittedly no intent to collide with another vehicle.

The jury found that Sanchez intentionally drove while intoxicated, with “actual, subjective awareness” of the “extreme degree of risk, considering the probability and magnitude of the potential harm to others.” (The standard for gross negligence under Tex. Civ. Prac. & Rem. Code § 41.001(11)). Therefore, Cincinnati argued that Sanchez’s subjective awareness of the risk he posed renders the collision intentional, rather than accidental.