The Department of Insurance has issued an advisory opinion (Attempt At Forced Settlement Of Basic Reparation Benefits 15-02) highlighting an insurance company practice of offering a bodily injury BI settlement to a claimant only if the claimant will give up his rights to any further BRB benefits undermines the purpose of the MVRA, and is against public policy.
If you encounter the following described abuse by an insurance company, the adjuster and the carrier should be reported to the Department of Insurance. Click HERE for information on filing a complaint. When a insurance company engages in this practice, they deny policy holders of protections they have paid for, adversely affect the insured getting their health insurance benefits, and deny/delay/interfere with subrogation by other insurers as provided by law.
As stated further in the advisory opinion:
the vast majority of bodily injury (“BI”) settlements involve third parties. By requiring that the injured person give up any claim to BRB, the insurer insists that the injured person forego the rights to a benefit the injured person paid for and is provided by the injured person’s own insurer.
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Liability coverage is all that should be at issue in a settlement of a BI case. The Department discourages efforts to abrogate an individual’s ability to get medical treatment by employing such a practice. This is particularly troubling in light of the fact that health insurance will not pay for treatment where other insurance is, or should be, available.
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At the very least this behavior is against public policy and could trigger a review of the insurer’s actions by the Department of Insurance in order to evaluate any potential violations of the Kentucky.