SOURCE: United Automobile Insurance Company

November 11, 2009 11:01 ET

Appeals Court Decision to Reduce Frivolous Lawsuits Related to PIP Auto Insurance Claims

MIAMI GARDENS, FL--(Marketwire - November 11, 2009) - County courts will be cleared of many unnecessary and unjustified lawsuits following a ruling from the 3rd District Court of Appeals on November 4. A three-judge panel ruled that a person couldn't sue his or her auto insurance company for failing to provide an explanation of benefits on personal injury protection claim.

"The result of the court's opinion will likely be a decrease in frivolous lawsuits filed solely for the purpose of obtaining attorney's fees from the insurance company," said Thomas Hunker, staff attorney in the appellate division of the office of the general counsel of United Automobile Insurance Company. "It will also simplify the personal injury protection litigation process and get the focus back on whether the bills were due and owing."

United Auto, one of the largest vehicle insurers in Florida, had appealed a 2007 decision by a Miami-Dade county court judge to award $1 in nominal damages and $19,530 in attorney's fees to A 1st Healthcare Systems Inc. The judge said that United Auto had failed to respond to the company's request for payment within 30 days. The same judge said the plaintiff was owed nothing for those medical bills because they totaled less than the deductible.

Such lawsuits are a legal tactic by plaintiffs' attorneys to turn court claims for personal injury benefits into a lawsuit for bad faith, Hunker said.

"The effect of adding these extra counts to a lawsuit is to take the focus off of the failure of the insured and medical provider to fulfill their obligations and cast the insurance company in a bad light," Hunker said.

The appeals court disagreed with the county court and with a circuit court that had upheld the decision to award damages and fees. Appeals court Judge Frank A. Sheperd wrote in a unanimous opinion that "it is clear there is neither a requirement nor a deadline for a personal injury protection insurer to respond to a request for payment."

Citing several other appeals court decisions and state law, the court wrote that a response is required only at the time of payment or rejection of a claim.

An auto insurance company can challenge a payment claim after the 30-day period, the court said, and the court has "never located in the statute any absolute deadline on such a challenge."

The appeals court went a step further and ruled that insured people cannot sue their insurance company for not providing an explanation of benefits on a medical claim. "In fact, the statute only authorizes one cause of action: a cause of action for personal injury protection benefits," the appeals court wrote.

"Personal injury plaintiffs can still sue insurance companies for bad faith under the bad faith statute," Hunker said, "but they will have to give the insurer notice and a fair chance to cure any alleged defect."


United Automobile Insurance Company ( is a property and casualty insurance company specializing in automobile insurance. The company is committed to providing its agents, and their customers, a quality product with state-of-the-art processing and claims service. Through its affiliates, UAIC provides a variety of insurance-related services including premium finance, claims processing and advanced on-line sales products. UAIC supports a host of organizations such as The Mike Lowell Foundation, Miami Children's Hospital, Children's Home Society, Heartsight Miami, The Boys and Girls Club of Broward County, St. Jude Hospital, Do The Right Thing, Florida's Children First, President's Fest in the Park, Aspira, The PASS Program and Switchboard Miami. Additionally, UAIC supports law enforcement programs, training and funded the Fallen Officer Memorial in Tropical Park.

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