Court interprets time limitations where the wrong insurer pays PIP benefits
Farm Bureau was assigned to pay PIP benefits to Merrill Hall, a pedestrian who was struck by a car. It paid more than $400,000.00 in benefits over several years, before determining that Allstate Insurance should have paid Hall's benefits as the insurer of the car that struck Hall. Allstate did not dispute that it was the first insurer in priority, since Hall was not insured and was not operating or occupying a vehicle. Nevertheless, Allstate argued that Farm Bureau could not collect the bulk of its PIP payments because it delayed too long in filing suit.
Allstate argued that the same "one year back" rule and one-year notice rule that apply to Hall or any injury victim should apply to Farm Bureau's claims. It also argued that the language of the Assigned Claims Plan did not authorize Farm Bureau to collect benefits as "the claimant." The Court of Appeals emphasized that insurers who are assigned claims through the Assigned Claims Plan get additional time not allowed to consumers: even where another insurer mistakenly pays benefits, the injury victim is bound by the one year notice and one-year back rules. On the other hand, an Assigned Claims Plan insurer can sue at any time within one year of paying a claimant, regardless of how old the oldest claim is. (Guess its obvious for whose benefit these rules are written, isn't it?)
Applying the special rule for Assigned Claims insurers, the Court held that Farm Bureau can sue Allstate and collect benefits, however, it can only collect bills that originated with a provider who had billed for a service and been paid within one year. Allstate would not be obligated to pay bills from any provider whose last billing was more than one year old.