Settled Lawsuit Provides Caution When Dealing with Insurance Companies

Farmers Insurance Group of Companies, the country's third largest insurer of both personal lines passenger automobile and homeowners insurance, recently settled a class action lawsuit in which policy holders alleged the company mishandled their claims after being injured in auto accidents. The settlement was approximately $140 million.

Specifically, the lawsuit argued that Farmers failed to pay reasonable expenses for necessary medical services related to automobile accidents under Medical Payments ("Med-Pay") and Personal Injury Protection ("PIP") coverage in automobile policies based on Farmers' use of certain claim adjustment systems and procedures.

The settlement includes claims filed with the insurance company for payment of medical bills related to an automobile accident under Med-Pay or PIP coverage from January 2001 to February 2009.

Catastrophic Accidents Can Lead to More Injustice with Insurance Companies

This action spotlights the frustration, even injustice, people often times experience when dealing with insurance companies following an automobile accident. Imagine when the accident has loss of life or required ongoing major medical care, and involves several possible responsible entities. In complex and catastrophic auto and trucking accidents, the inequities for the injured party can increase dramatically.

Following a tragic auto or truck accident, insurance companies (and other responsible parties) may try to mitigate their exposure and push for a quick settlement that is not fair to the injured party. The nation's courts, then, can serve to level the playing field for individuals when dealing with large insurance companies, especially in incidents of great emotional and financial loss.


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