An Ohio appeals court upheld a ruling for State Farm on July 28, 2026, over how it paid a car crash medical claim.
The dispute started with a 2019 car accident in Franklin County, Ohio. The driver, insured by State Farm, said the other motorist caused the crash and left her with lasting injuries and property damage. Her policy carried $5,000 in medical payments coverage, or MPC - a first-party benefit that pays medical bills regardless of fault.
The wrinkle was who got paid. The driver's health insurer, Medical Mutual of Ohio, had already covered her accident-related bills. It then filed a subrogation claim - a request to be reimbursed - with State Farm through a third-party vendor, The Rawlings Company (Rawlings). In October 2020, State Farm sent $4,809.03 of the MPC benefit straight to Rawlings.
The policyholder said the money should have gone to her, not the vendor, and that State Farm stalled on the remaining $190.07. That last check did not go out until May 2024. She sued for breach of contract and bad faith.
After a bench trial, the trial court ruled State Farm did not breach the policy by paying Rawlings directly, or by paying the $190.07 when it did. It called the delay reasonable, pointing out that the driver did not turn over her medical records until after she sued, during discovery.
That reasoning carried into the bad faith claim. In Ohio, insurers must handle and pay claims in good faith, and they fall short when they deny or delay for an "arbitrary or capricious" reason. The court said even "foot-dragging" can support a bad faith claim - but the real test is not whether the insurer got it right, only whether the decision "lacked a reasonable justification." With the handling already found reasonable, the appeals court agreed there was no real dispute left to try and upheld the decision.
The ruling also settled a fight over medical records. The policyholder sought a protective order to stop State Farm from "selling, publishing, sharing, or exchanging" her health information. The court said no. The policy required her to authorize State Farm to obtain records it "deems necessary to substantiate" her claims, and barred her from "restricting State Farm from retaining and using that information for legitimate lawful business functions." A bare assertion that the insurer "may sell" her data did not show real harm.
The appeals court affirmed for State Farm.
