The United States District Court for the Western District of Pennsylvania recently issued a decision which may increase the rights of parties injured in car accidents to recover damages when their insurance company improperly refuses to pay for medical expenses incurred as a result of an accident. 

In Miller v. Allstate Fire & Casualty Insurance Company, Jason Miller was injured as a result of an August 23, 2007 motor vehicle accident. Miller sought treatment with a chiropractor for these injuries. At the time of the crash, Miller was insured with Allstate. Allstate referred Miller’s claim for payment of the chiropractor’s bills to a Peer Review Organization ("PRO") to determine whether the treatments were reasonable, necessary and related to accident, and whether Allstate would pay the bills. After receiving the opinion of the PRO, Allstate refused to pay the chiropractor’s bills. Miller filed a lawsuit against Allstate, claiming that the bills, which amounted to more than $1,000.00, were related to the accident, and that Allstate was responsible for the payment of the bills. Miller also claimed that Allstate had handled his claim in bad faith, and made a claim for punitive damages.  

Allstate filed a motion with the court attempting to dismiss the claim for bad faith. Allstate argued that Pennsylvania law did not permit a claim for bad faith damages in a lawsuit concerning the non-payment of medical bills arising from a car accident. Under Pennsylvania law, if an insurance company refuses to pay medical bills which are later determined by the court to be related to an accident, the insurance company is required to pay the medical provider the outstanding amount, plus interest at 12%, as well as the costs and attorney’s fees associated with prosecuting the claim. 75 Pa.C.S.A. §1791(b)(6). Allstate claimed that this was Miller’s only remedy, and that the Pennsylvania Motor Vehicle Financial Responsibility Law ("MVFRL") preempted any claim for punitive damages for bad faith under Pennsylvania’s insurance bad faith law. 

Miller argued that, in addition to the damages outlined in 75 Pa.C.S.A. §1791(b)(6), he was also entitled to punitive damages, as Allstate had acted in bad faith in refusing to pay for medical expenses which were directly related to the accident. Miller claimed that Allstate had "abused the peer review process", and had mishandled his claim to the benefit of the insurance company, and to Miller’s detriment. 

The court agreed with Miller, holding that the allegations of bad faith were based upon an abuse of the peer review process and mishandling of the claim, which was separate and distinct from Miller’s claim that he was entitled to payment of his medical bills. The court stated that because the claim of abuse of the peer review process fell outside of the scope of the protections afforded to an insured by the MVFRL, Miller was also entitled to bring a claim for bad faith and punitive damages. This decision is extremely important to people injured in car accidents, as it expands their rights when their own insurance company improperly refuses to pay for medical expenses incurred as a result of a car accident.

 Abrahamsen, Conaboy & Abrahamsen, P.C., a Scranton, Pennsylvania law firm, offers free consultations for personal injury, auto accidents, products liability, workers comp., social security claims and social security disability appeals. If you have been injured or disabled, you probably have questions: Do I have a case?; Who will pay my medical bills?; Should I talk to the insurance company adjuster?; Am I entitled to wage loss or disability benefits? With offices conveniently located in Scranton, Milford, Lords Valley, Stroudsburg, and Mount Pocono, our experienced attorneys can answer your questions and will work to get the benefits and compensation you deserve. No fee unless we recover for you. DON’T GO IT ALONE! Call or E-mail one of our experienced attorneys to learn about your rights.