Allstate, Other Insurers Settle Lawsuit Related to PIP Insurance
A recent lawsuit between policyholders and their insurance companies has settled a question that has long plagued injured parties. In this case, the court forced Allstate to provide coverage in accord with their own contracts.
Lead plaintiff Gail Pierce was the lead plaintiff in the class-action lawsuit filed against Allstate. The lawsuit claimed that Allstate did not fulfill obligations it had agreed to by contract. The incident stemmed from a traffic accident. Pierce had purchased PIP (personal injury protection) for her son. Allstate was supposed to pay 100% of the medical expenses, but the policy contained a $500 deductible. Allstate reduced their obligation to the policy limit and then applied the $500 deductible.
What Does This Mean?
This essentially means that insurance companies have two options. They can either pay the policy limit to the policyholder or charge the deductible. They cannot do both. It will now be possible for several claimants to get reimbursement for either their deductible or coverage for the full value of the policy. The settlement fund contains $14 million from Allstate, which used ambiguous language and preyed on their policyholders’ lack of knowledge to reduce their financial obligation to their customers.
Claimants will have until November 13th to file a motion to become part of the class and be reimbursed for expenditures that Allstate should have covered, but did not.
PIP Claims and Lawsuits
The PIP system was created for the purpose of taking the courts out of the equation. As traffic accidents can quickly cause the courts to bottleneck, it was considered a better way of handling traffic liability than the tort system that it replaced. Since it became popular, only a handful of states have retained no-fault insurance as the dominant way of handling traffic liability. Florida is among the states that still operate on a no-fault system, although there are many who are lobbying to go back to the tort system.
In Florida, motorists are still allowed to file lawsuits against one another, but only if their injuries are considered severe. This includes broken bones, but as a point of principle, it wouldn’t make sense to file a traffic liability lawsuit unless there were permanent injuries, significant missed time from work, or a moderate reduction in the victim’s quality of life. In other cases, a PIP policy may only cover a fraction of the overall medical expenses leaving injured parties with massive amounts of debt and no income.
Even the insurance companies don’t like it, particularly in Minnesota, where there is a bar to placing policy limits on personal injury claims. Insurance companies don’t like it because it becomes more difficult to calculate premiums when there is no policy limit. Drivers don’t like it either because their premiums are through the roof.
Talk to a Miami Personal Injury Attorney Today
If your insurance company is giving you a hard time and trying to deny or devalue your claim, you do have the option of litigating the dispute. Call the Miami personal injury attorneys at the office of Alan Goldfarb, P.A. today to schedule a free consultation.
Resource:
law.com/dailybusinessreview/2020/06/30/allstate-insurances-14m-settlement-is-good-news-for-policyholders-with-personal-injury-claims/
https://www.goldfarbpa.com/woman-who-filed-lawsuit-against-insurance-carrier-loses-big/
