Allstate hit by another potential class action

Lawsuit attempts to establish clarity over carrier’s ability to choose medical examiners

Allstate hit by another potential class action

Insurance News


A recommended federal class-action lawsuit against Allstate has been approved by the Pennsylvania Supreme Court.

The class-action is in relation to Allstate’s policy that mandates claimants undergo medical exams by a doctor of the carrier’s preference before they can receive benefits.

Last month, U.S. District Judge A. Richard Caputo of the Middle District of Pennsylvania ruled in Sayles v. Allstate Insurance that Allstate’s policy provision opposed the state Motor Vehicle Financial Responsibility Law, and predicted that the state Supreme Court would find the provision unenforceable.

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“The court reads the plain language of Section 1796 [of the law] to prohibit precisely what Allstate allegedly did in this case,” Judge Caputo said, as reported in a Pittsburgh Post-Gazette article.

“Because it appears that Allstate’s examination requirement permits the insurer to require its insureds to submit to an [independent medical exam] without first filing a petition demonstrating good cause, and because the examination requirement transfers control over the statutory safeguards from the province of an impartial court to the discretion of an interested insurer, the court predicts that the Pennsylvania Supreme Court would find the examination requirement, as alleged, in conflict with Section 1796 and thus violative of Pennsylvania public policy.”

Judge Caputo dismissed all other claims raised, despite the ruling green-lighting claims that the policy clashes with the Motor Vehicle Financial Responsibility.

Charles Kannebecker, Weinstein Schneider Kannebecker & Lokuta, said that the ruling must present “tremendous clarity” on the issue.

“Now independent judges will determine who the examining physician will be, so the insurance company can’t use their hand-picked doctors,” Kannebecker said.

Kannebecker said he has seen similar provisions in different cases concerning various insurance carriers, and plans to file additional cases.

The initial case came about when a December 2015 car accident injured Sayles. Allstate subsequently asked that she undergo an independent medical exam by a doctor that the carrier picked before she could claim any benefits. Allstate never appealed to the court to force the physical exam.

Sayles challenged the policy as she argued it violated the state law that requires carriers to acquire a court order based on “good cause” before refusing to pay a benefit.

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