GEICO Reimburses Client for Lost Wage Claim November 23, 2009

I have blogged earlier about a matter where the client’s claim for lost wage benefits resulting from a car accident was denied. After looking into the denial and reviewing my client’s insurance policy, it was apparent that when she purchased her car insurance, GEICO excluded lost wage coverage from her policy for a cheaper rate. The reduction in her premium amounted to $18.00 per year. Understanding the New York State no-fault law, GEICO, or any other insurer, is required to include in every policy of car insurance written in New York State, protection for Basic Economic Loss. Basic Economic Loss provides for medical care and treatment and lost wages, as well as “other necessary” expenses, if you are injured through the use or operation of a motor vehicle. These basic protections are mandated by law and I began to question GEICO’s ability to exclude these protections. Despite numerous phone calls, GEICO continued to deny the client lost wage benefits based on the exclusion in the policy. I told the client that despite what GEICO claimed, they could not issue such a policy of insurance.

I researched the New York State Department of Insurance General Counsel opinions and found a strikingly similar issue. The opinion was issued in response to a request by a consumer asking if he was able to negotiate a cheaper insurance policy by excluding lost wage protection from his coverage. The General Counsel opinion made it clear that what the consumer proposed could not legally be done in New York state. Every insurance policy must include coverage for Basic Economic Loss.

I filed for arbitration to force GEICO to pay the client the lost wages, despite the policy exclusion. As an exhibit, I attached the New York State Department of Insurance General Counsel opinion. GEICO was due to answer the arbitration request on November 20, 2009. Instead of an answer, I received a phone call from an adjuster agreeing to settle the claim for the full amount owed. Despite the opinion, GEICO defended their actions and still maintained that the policy as sold was permitted in New York.

This case should be a reminder to all to use an insurance broker or read the terms of your policy if you decide to buy online or over the phone. I have published a book, “A Lawyer’s Guide to Car Insurance”, to help you understand your insurance policy and to make sure that you are properly protected. You can order the book, free of charge, by following this link.

Frank Dito is a New York Personal Injury attorney specializing in New York real estate law , New York business law, and New York franchise law. You can visit his Law Firm Decker, Decker, Dito and Internicola website by clicking here, download his FREE New York Car Insurance book, or call him at 718-979-4300 or 1-800-310-5520 for a free case analysis.

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