Drug Crisis Impact Increases

by Sue Quimby, CPCU, AU, CIC, CPIW, CLP, DAE
MSO, Inc.

The United States is currently experiencing the worst drug crisis in its history, exacerbated by the pandemic lockdowns and increased trafficking at our borders. The crisis impacts individuals, families, and society as a whole. Helping clients understand the prevalence and dangers of drug overdoses is another value-added service of the professional insurance agent.

Drug overdose deaths continue to rise.  The Centers for Disease Control (CDC) advises that over 107,000 people died from drug overdoses and drug poisonings in the twelve months ending in January 2022. Of these, the majority, or 70,600, involved synthetic opioids – primarily fentanyl. In fact, more than 1 million people have died from drug overdoses since the year 2000.   Over 1500 deaths per week are due to some type of opioid, as calculated by the National Center for Health Statistics. 

Fentanyl is a synthetic opioid which can be 50 to 100 times more potent than morphine.  As little as 2 milligrams can be lethal, and many illegal pills contain as much as 5 milligrams.  There is no way for the user to tell what is in the illegal pills, powder or liquid being taken. According to the Drug Enforcement Agency (DEA), fentanyl is involved in more deaths for Americans under the age of 50 than any other cause.  United States customs and Border protection seized over 412,000 pounds of illegal drugs in the first six months of 2023, including 22,000 pounds of fentanyl.

The COVID-19 pandemic contributed to a marked increase in overdose deaths. The isolation of the lockdowns meant less access to mental health care, drug treatment and prevention resources. Anxiety, depression, economic uncertainty, and loneliness led to increased drug use. Supply chain disruptions impacted availability of many prescription drugs.  Fentanyl was cheaper and more readily available than heroin. Telehealth use grew, which physicians advise is a barrier to the ability to monitor those at risk of misusing legal and illegal drugs (healthcarefinancenews.com).  

The pandemic meant drastic and rapid increases in staff requirements for healthcare providers – sometimes without adequate background checks. Increased use in technology and shifting to more “hands-free” services also contributed to possibility of improper diversion of drugs, as more people had access to drug cabinets and supplies. 

The estimated economic impact of illegal drug use is staggering: $193 billion (hhs.gov).  Ideally, opioids are designed to decrease pain, making it easier for people to work.  However, misuse of painkillers can lead to absenteeism, accidents on the job, and reduced availability of workers due to death, disability, or incarceration.

What are the insurance implications of these events? An overdose often involves a visit to the emergency room.  Health insurance plans that cover emergency room care would respond. Life insurance may pay in the event of an overdose death.  Typical exceptions include death during the early years of the policy, or the “contestability period”.  Benefits may be denied if the insured lied about drug use on their application.  It may be surprising to know that intentional overdoses after this period are often covered. There is no suicide exception.

For automobile and truck insurance, driving under the influence could mean denial of a claim, or reduction in the amount paid, in the event of an accident.  Coverage could be terminated, or nonrenewed, or premiums could increase due to the higher risk.  From a liability perspective, there would not be coverage for anyone causing damage or injury while under the influence of illegal drugs. For example, a forklift operator runs into a wall, damaging it, or a homeowner’s son throws rocks through the neighbor’s window.  Business use of other structures on a homeowners policy is excluded. For example, if the homeowners are operating a meth lab in their detached garage and it causes an explosion, coverage can be denied.

Illegal drug use impacts all of us.  Helping clients understand the problem, as well as how to lessen the effect, is another sign of the true insurance professional. 

This article was previously published in Insurance Advocate® magazine and is provided courtesy of MSO®, Inc. (The Mutual Service Office, Inc.) for non-commercial use only. For any other licensing requests or permissions, please contact squimby@msonet.com. © MSO®, Inc. 2023.

MSO provides advisory services for all property and casualty lines except workers compensation. This includes customized forms and manuals for insurers, MGAs, and agents / brokers. Additional information is available at www.msonet.com.

This article is for educational and discussion purposes only and it is not insurance or legal advice and should not be relied upon when making insurance or legal decisions. Nothing herein shall be construed to constitute a legal or underwriting opinion. Nothing herein shall be construed as offering any political, social, or public policy opinion by the author or MSO. Neither the author nor MSO are responsible for errors in, or the accuracy or currentness of, the article.

Sue Quimby is vice president, media editor, client services and training, senior product development analyst at MSO, Inc. You can reach Sue at squimby@msonet.com or 201.857.9128.

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