Key Takeaway
Nassau County court finds no-fault insurance verification demands unclear, denies carrier's summary judgment motion for disclaimer validity in State Farm v Burke Physical Therapy case.
State Farm Mut. Auto. Ins. Co. v Burke Physical Therapy, P.C., 2022 NY Slip Op 30580(U)(Sup. Ct. Nassau Co. 2022)
The provider goes to the EUO and gets bombarded with post EUO demands that are the functional equivalent of a proctology examination. Provider objects, 120-days pass and the disclaimer is issued. Is that disclaimer valid?
The Court struggled with this one and said this cannot be answered at the summary judgment stage.
“In this Court’s view, only one conclusion can be drawn-that on the precise question at issue here, the law is unsettled. To the extent that the Court finds one position more persuasive than the other, the Court is of the opinion that for purposes of the determination herein, it is of no import. What matters is the reasonableness of BURKE’s justification{or refusing to provide the documents sought. In the absence of a clear answer as to whether or not STATE FARM was entitled to obtain the numerous documents sought at the verification stage of the claims, the Court cannot find, as a matter of law, that BURKE’s justification was unreasonable. Accordingly, the Court cannot find, as a matter of law, that BURKE failed to satisfy its obligation under 11 NYCRR 65-3.5(0) to offer, within 120 days, “written proof providing reasonable justification for the failure to comply.” The Court thus finds that, on the record presented, STATE FARM has failed to meet its burden to establish a right to disclaim coverage. See TAM Medical Supply Corp. v Tri State Consumers Ins. Co., 57 Misc 3d 133(A) (App Term, 2d Dept., 2d, !Ith & 13th Jud. Dists. 2017).”
Do not ask me for an opinion. I understand what the carrier is trying to do, and it falls within the literal context of the regulations. Yet, are these demands better propounded as discovery demands in the context of litigation or arbitration? At what point is the verification protocol abused or do the equities fall in favor of casting the verification demands as discovery devices better suited during the dispute resolution phase of the claim?
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Common Questions
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New York's no-fault insurance system requires all drivers to carry Personal Injury Protection (PIP) coverage. This pays for medical expenses and lost wages regardless of who caused the accident, up to policy limits. However, you can only sue for additional damages if you meet the 'serious injury' threshold.
