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Class action says auto insurer committed fraud

Fri May 27th, 2011 on     Insurance Claims,    

A class action lawsuit was filed recently against an auto insurer, claiming the insurance company fraudulently denied military families benefits following car accidents. The complaint alleges the company violated insurance laws and regulations and charges the insurer with breach of contract and breach of faith. The plaintiffs are asking for punitive damages from the company.

In a class action, there must be at least one named plaintiff, the person or people who have a representative claim. In this case, there are four such plaintiffs, all connected with the military.

For one active-duty servicewoman, the experience described in the complaint began when she was “induced” to purchase her auto insurance from the company. The company advertised its services to military families with promises of the “exclusive privileges” of its coverage. After a rear-end collision, though, this plaintiff’s claim for medical treatment was denied.

The company, according to the complaint, sent the claim to another company that then prepared “sham file reviews.” The reviews, of course, concluded that medical treatment was not necessary.

Another woman, this one the daughter of a veteran, tells a similar story. After an accident in which she was almost killed, her claim was forwarded to the same reviewing company, which proceeded to prepare a sham file review. That review bore the electronic signature of an acupuncturist in Colorado. According to the complaint, “the report states in no uncertain terms that ‘A Physician Review’ had been completed.” The insured says the assertion is patently false.

Other named plaintiffs say their claims were denied based on as many as nine sham file reviews, all purportedly signed by non-physicians in states far removed from their home states or the state where their accidents occurred.

Reports included no information about the insurance company’s reaction to the class action suit.

Source:, “Class Action Claims Insurer Won’t Cover Military Families in Need,” Nick Mccann, 05/12/2011

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