DENVER—A pedestrian struck by a hit-and-run driver can pursue a claim under an accidental death and dismemberment policy that AIG Life Insurance Co. issued to his employer, Marriott International Inc.

That ruling, handed down on Monday by the 10th U.S. Court of Appeals in Hans-Gerd Rasenack vs. AIG Life Insurance Co., involves AD&D coverage Mr. Rasenack purchased through payroll deductions before the 2003 non-occupational accident.

The insurance policy, administered by AIG Claim Services, a unit of American International Group Inc., provides an accidental paralysis benefit and rehabilitation benefits.

In 2005, the claims administrator denied Mr. Rasenack and his spouse policy benefits after concluding he did not suffer from “hemiplegia,” as defined by the policy. The policy defines hemiplegia as “the complete and irreversible paralysis of upper and lower limbs of the same side of the body,” according to court records.

A district court reviewed the administrator’s benefits denial and granted AIG summary judgment, finding “substantial evidence that Mr. Rasnack’s condition did not meet the policy’s definition,” court records state.

But the appeals court said “it appears that AIG cherry-picked the information helpful to its decision to deny Mr. Rasenack’s claim and disregarded the contrary opinions of the medical professionals who examined, treated and interviewed Mr. Rasenack.”

It reversed the lower court and remanded the case for further consideration of Mr. Rasnack’s claim.