State Farm Fire and Casualty PIP Benefits Kentucky Class Action

Insurance companies lose money when they pay claims, but they must follow the insurance laws of the states where they do business. The complaint for this class action alleges that State Farm Fire and Casualty Company violated the Kentucky Motor Vehicle Reparations Act (MVRA) when it failed to pay certain claims.

The MVRA has a number of aims. According to the complaint, three of them are “To provide prompt payment to victims of motor vehicle accidents without regard to whose negligence cause the accident…,” “To encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation…” and “To reduce the need to resort to bargaining and litigation through a system which can pay victims of motor vehicle accidents without the delay, expense, aggravation, inconvenience, inequities and uncertainties of the liability system…”

Under the MVRA, the complaint says, “an insured’s medical bills and treatment submitted for payment under [Personal Injury Protection, or PIP] benefits are presumed to be reasonable.”

If an insurer wants to claim that the bills are not reasonable, the complaint says, then it must file suit with the courts and provide evidence that they are not reasonable. However, State Farm seems to have reduced or denied payments of claims based on utilization reviews.

The complaint alleges, “a utilization review of a Kentucky PIP claim is an impermissible and unlawful procedure for terminating, denying, or reducing payment of an insured’s PIP benefits” under the MVRA.

Nevertheless, the complaint alleges that State Farm Fire “paid for a substantial volume of utilization reviews which the insurer in turn relied upon as a basis to deny payment of owed PIP benefits.”

The complaint Department of Insurance undertook a market conduct examination of State Farm Fire’s activities in Kentucky, the findings for which were published in 2016.

According to the complaint, “State Farm Fire acknowledged that the failure to pay owed PIP benefits in a timely manner violated [Kentucky law] and warranted remediation with payment of 18 percent interest to the insured subject to the violation.”

A similar examination was made of State Farm Fire’s parent company, State Farm Mutual.

The class for this action is all individuals who, at any time since February 20, 2005, had payment of their Kentucky PIP benefits reduced or denied under an auto insurance policy issued by State Farm Fire due to the findings of a utilization review and who did not, before the filing of this lawsuit, have the denied benefits paid in full along with eighteen percent interest on overdue benefits and attorney fees.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

State Farm Fire and Casualty Nonpayment of PIP Benefits Kentucky Complaint

February 20, 2020

Insurance companies lose money when they pay claims, but they must follow the law if they want to deny payouts to insureds. The complaint for this class action alleges that State Farm Fire and Casualty Company violated the Kentucky Motor Vehicle Reparations Act (MVRA) when it failed to pay certain claims.

State Farm Fire and Casualty Nonpayment of PIP Benefits Kentucky Complaint

Case Event History

State Farm Fire and Casualty Nonpayment of PIP Benefits Kentucky Complaint

February 20, 2020

Insurance companies lose money when they pay claims, but they must follow the law if they want to deny payouts to insureds. The complaint for this class action alleges that State Farm Fire and Casualty Company violated the Kentucky Motor Vehicle Reparations Act (MVRA) when it failed to pay certain claims.

State Farm Fire and Casualty Nonpayment of PIP Benefits Kentucky Complaint
Tags: Auto Insurance, Denial of Benefits, Incomplete payment of benefits due, Insurance