Insurance — PIP benefits

Marilus Rodriguez suffered personal injuries while operating a motor vehicle owned by her mother and insured by the defendant. The insurance policy provided personal injury protection ("PIP") medical expense benefits with limits of $250,000 per person/per accident. Rodriguez's treating medical providers submitted bills totaling $623,677.51 to the defendant, of which Allstate paid $250,000 in accordance with the terms of its policy. The plaintiff Endo Surgical Center, as subrogee of Marilus Rodriguez, appeals from the order denying its application for an order compelling the defendant Allstate New Jersey Insurance Company to comply with the arbitration award that directed the defendant to pay the plaintiff $11,400 in personal injury medical expense benefits. The plaintiff argues that while its demand for arbitration was pending, the defendant had a duty to notify it that the insured's PIP benefits were nearly exhausted and had violated this alleged duty when it depleted the PIP benefits before the arbitration award was issued. The appellate panel rejects that argument and affirms, finding that, absent bad faith, an insurer may settle with claimants, notwithstanding that the settlements may exhaust the policy limits.

Case Law Alert - 1st Qtr 2010