10-Year-Old Lawsuit Against Allstate Over Medical Payments Is Settled

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August 17, 2009 Monday 04:13 PM EST

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10-Year-Old Lawsuit Against Allstate Over Medical Payments Is Settled

Chad Hemenway

NORTHBROOK, Ill.

A case, which has been in a circuit court in Illinois for nearly 10 years over the payment of medical expenses on Allstate automobile insurance policies, has been settled, the insurer said.

Allstate said in a statement that it agreed to settle the nationwide class-action lawsuit, Strasen vs. Allstate, "on terms Allstate considered fair and appropriate to avoid the burden and expense of continued litigation." The suit was filed in the Circuit Court of Madison County, Ill., and includes all entities of Allstate and subsidiary Encompass.

The lawsuit was filed by auto accident victims who alleged Allstate failed to pay, in whole or in part, medical expense benefits under the medical payments or personal injury protection coverage in the insurer's auto and homeowner insurance policies. The plaintiffs claimed Allstate used a computer program that did not properly calculate the payments, according to a Web site set up for those who may benefit from the settlement.

Anyone who submits a valid claim form by Feb. 10, 2010, shall, subject to the applicable policy limits, potentially receive 60% of the difference between the amount of the bills submitted and the amount previously paid by Allstate, according to the settlement.

Allstate "continues to believe its medical bill review practices were and are appropriate and fully comply with the law."

Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior).

On the afternoon of Aug. 17 shares of Allstate Corp. stock were selling at $27.71, down about 2.9% from the previous close.

(By Chad Hemenway, associate editor, BestWeek: [email protected])

August 18, 2009