Safeco auto insurance customers who were injured by uninsured or underinsured motorists or who filed medical claims during the last eight years may be able to collect additional compensation under a court settlement reached this week.
Tens of thousands of policy holders who insured multiple vehicles with Safeco will be notified in May that they have 90 days to ask that their claims be reconsidered in light of the settlement of the class-action lawsuit approved March 30 by U.S. Magistrate Richard Anderson. Notices will be sent by May 1, said Billings attorney Carey Matovich, who represented Safeco.
When policy holders receive the notice of the settlement, they must respond within 90 days or forfeit the right to reopen their claims.
The settlement was reached as a byproduct of a Montana Supreme Court ruling a year ago, Hardy v. Progressive Specialty Insurance Co.
In that decision, the court ruled that insurance provisions prohibiting “stacking” of multiple insurance policies were unenforceable. The court also struck down a Montana law that allowed insurance companies to include anti-stacking language in their policies.
Stacking means adding the coverage of multiple policies. For instance, if a customer purchased uninsured motorist coverage of $50,000 in policies for three vehicles, he could potentially collect $150,000 to compensate for injuries caused by an uninsured motorist.
The state Supreme Court ruled that uninsured- and underinsured- motorist coverage followed the policy holder, not the vehicle.
Settlement in the Safeco cases allows policyholders to reopen their claims, if they think they would have been entitled to more compensation had they been able to stack coverage from multiple policies, said Gene Jarussi of Billings, one of two Montana attorneys representing the class.
The issue of whether the Hardy ruling should be applied retroactively has not been decided by the courts, Matovich said. Safeco, however, agreed to apply its reviews to cases going back eight years, the statute of limitations period for claims asserted in the lawsuit.
Other insurance companies may challenge whether Hardy can be applied to old cases, but Safeco determined that it was better to settle than face a protracted lawsuit, he said.
Matovich said Safeco doesn’t have a firm estimate of customers who may be eligible to seek review, but court records said the company found 128 people who exhausted their limits under their medical provisions and another 46 who exhausted the limits of their uninsured or underinsured coverage.
Not all of those people will seek review, Matovich said, and some who settled for less than policy limits will. There may be others who were not found in the company’s record searches.
An affidavit filed in November estimated the additional claims will cost about $3 million.
Safeco agreed to pay attorneys fees to Jarussi and Great Falls attorney Lawrence Anderson. Attorneys fees will not come out of compensation paid to customers.
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Topics Lawsuits Legislation Claims
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