Class Action: Esurance Improperly Cuts Off PIP Benefits During Medical Treatment

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In a proposed class action lawsuit, a Washington resident claims Esurance Insurance Co. violated the terms of her automobile insurance policy by terminating personal injury protection (PIP) benefits once the insurer determined she had reached “maximum medical improvement.”

The lawsuit explains that under Washington insurance regulations, insurers are permitted to “terminate, limit, or deny” PIP benefits – coverage for “reasonable and necessary” medical expenses sustained in an automobile accident – only if the treatment is not reasonable, not necessary, unrelated to the accident, or isn’t performed within three years of the date the accident occurred. Contrary to state law, Esurance allegedly adds to these stipulations and will discontinue PIP coverage once the company determines the insured has reached “maximum medical improvement” (MMI), a stage where Esurance effectively deems on its own terms whether any further treatment is “unreasonable, unnecessary, or unrelated to the accident.” As stated in the complaint:

“Despite the clear regulations, Defendant has terminated, limited, or denied its first-party insureds and third-party beneficiaries PIP benefits while they were still receiving treatment for injuries by arguing that the treatment, and any future treatment, was unnecessary since the claimant had reached maximum medical improvement.”

Per the plaintiff, the case says the woman had been receiving chiropractic and massage therapy from March to June 2018 for injuries she sustained in a car accident that occurred on March 6. After requesting that the plaintiff undergo a medical examination, the defendant concluded that she had reached MMI and then terminated her PIP benefits even though she still required “ongoing and continuing medical treatment,” the suit attests.

The case argues that the defendant’s practice of denying PIP coverage based on MMI violates the terms of its insurance policies and is nothing more than a “scheme to manufacture a defense to first-party and third-party beneficiary claims.”

Originally filed in state court, the lawsuit has recently been removed to the District Court for the Western District of Washington.