Auto insurance law is complex – even for other insurance companies.

This fact was illustrated recently in the case of GEICO v. Gables Insurance Recovery Inc., where an auto insurer and a health care insurer were battling it out in Florida’s Third District Court of Appeal over a claim of recovery for medical bills incurred following a car accident.
wetstreet-199x300On one hand, the health care insurance company argued the auto insurer was required to pay 80 percent of the medical expenses reasonably incurred by its insured. The auto insurer, on the other hand, argued it didn’t have to pay anything above the $10,000 personal injury protection limit, as indicated in the policy.

While the trial court and circuit court’s appellate division both sided in favor of the health care insurer, 3rd DCA reversed, finding the auto insurer’s argument compelling and refusing to force an insurer to pay above the policy limits without a finding of bad faith.

Our Sarasota accident attorneys recognize that while this case didn’t centrally involve an injured motorist, the question of how much an insurer will pay is relevant to most personal injury and wrongful death cases. The case shows that even when insurers are up against other deep-pocketed corporations, they are often unwilling to bend or settle.

Accident victims often find this one of the most frustrating aspects of an accident. Insurance companies will often offer crash victims low-ball offers in the immediate aftermath. We encourage people to sign nothing until they’ve spoken first with an injury attorney, as you may unwittingly be signing away your rights.

In the GEICO case, the underlying facts are the auto insurance company’s client sustained injuries in a crash in May 2008. At the time of that accident, she was insured by a personal injury protection plan for $10,000. This is no-fault coverage that is paid to insured in the event of a crash. Florida requires each driver to carry a minimum $10,000 PIP policy (though unless injuries are serious, some companies may only reimburse for up to $2,500, depending on the severity of injuries).

She sought medical treatment, and thereafter assigned her benefits to the health care provider who treated her. That firm in turn assigned benefits to its own insurer. The health care provider’s insurance company submitted an invoice of insured’s medical bills. The auto insurer responded by paying less than the total amount billed.

The health care provider insurer in turn filed a lawsuit against the auto insurer for breach of contract, alleging failure to pay benefits. The auto insurer countered it had no further liability because the policy’s $10,000 PIP limit had been exhausted.

Health care insurer then submitted request for summary judgment indicating the auto insurer was required to pay 80 percent of all reasonable medical expenses. Auto insurer filed a cross motion saying payment was capped by policy limits.

Trial court issued summary judgment in favor of health care insurer, and the appellate division affirmed. However, the 3rd DCA reversed.

The appellate panel ruled that because the auto insurance company paid out the maximum PIP benefits available under the policy, it could not be compelled to pay additional benefits absent a finding of bad faith. The court ruled nothing in the statute requires auto insurers to pay in excess of their own limits or set aside funds in anticipation of litigation regarding the remainder of unpaid claims.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

GEICO v. Gables Insurance Recovery Inc., Dec. 10, 2014, Florida’s Third District Court of Appeal

More Blog Entries:

Special v. West Boca Medical Center – Florida Supreme Court Weighs Wrongful Death Lawsuit, Dec. 6, 2014, Sarasota Car Accident Lawyer Blog