How do I disable always on voice chat in Dead Island?

As of the latest Dead Island patch, there is now a way to disable voice chat in the options:

The only way to do it as far as I know is to change the default Windows microphone in your audio settings. If you change it to something that isn't really a microphone like "Line In," then it is effectively turned off in Dead Island. This doesn't really affect other "real" voice applications (Skype/Mumble/etc) as you can just manually set the microphone in each of those. While it isn't in game, it is currently the one and only solution.

For those running an older version that doesn't have the voice chat toggle, you may follow these steps to turn off voice chat:

Note: turn Dead Island off before doing this.

1. Go to the sound options for your computer. (In Windows 7, this is Control Panel -> Sound)
2. Select the Recording tab.
3. Find an unused input device, such as Line-In or Stereo Mix.
4. Right click -> set as default.
5. Right click -> set as default communications device.
6. Double click, switch to Levels tab, set volume to 0.
7. Start Dead Island.

Alternatively, if you have a USB device as your audio input, unplug it, start Dead Island, then plug it back in.

Please also note that if you are using an external voice chat client such as Ventrilo, Mumble, or TeamSpeak, you will want to set up the respective client to use your actual voice input instead of the default.