Allstate required to pay fees for overdue PIP benefits, despite being second in priority
In Pernell v. Allstate, the Court of Appeals required Allstate to pay the injured family's attorney's fees and costs, even though QBE Insurance was lower in priority to pay PIP benefits and ultimately was required to pay them. The Court noted a longstanding statutory and common law policy obligating a no fault insurer to pay benefits when due, and to dispute priority issues with the remaining insurance carriers.
The fact that Allstate was ultimately correct in its determination that QBE should bear first responsibility to pay benefits did not excuse Allstate from paying PIP benefits on a timely basis in the interim. The Courts have previously made clear to no fault insurers that priority disputes should not stand in the way of insureds' timely receipt of benefits and litigation over priority should be the insurers' problem, not the insured victim's.