Farmers Insurance has settled a class action lawsuit for close to $140,000,000 for mishandling claims made by hundreds of people injured in car crashes. Because of its claims adjustment procedures, Farmers either didn’t pay at all, or didn’t pay everything it should have paid, on personal injury protection (PIP) and medical payment claims filed for medical services needed by people injured in car accidents.
The claims in question were filed from January 2001 to early February
2009. The case recently settled according to court documents (PDF).
Under the settlement, claimants are entitled to 60 percent of the
difference between the amount of the medical bills submitted to Farmers
and the amount paid by Farmers. If you think you’re covered by the
settlement and haven’t received the paperwork in the mail, you can get a
claim form online.
Farmers says it settled the suit ”to avoid the burden and expense of
continued litigation.” There’s speculation that Farmers settled to avoid
a blockbuster jury award. Given the nationwide reach and eight-year
claims period involved in the suit, who knows how much a jury could have
awarded the class?
This is especially relevant when you consider Farmers’ previous
experience with class action lawsuits over its PIP coverage. Earlier
this year, a jury ordered Farmers to pay about $9 million on claims that
it underpaid PIP claims, again, because of the process it used to
determine how much to pay.