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How Can An Insurance Company Deny You PIP Coverage in Washington? A Case Study

Posted by Brian C. Zuanich | Feb 18, 2019 | 0 Comments

The phrase “winning on a technicality” is generally a short-hand way of expressing disgust at lawyers and the entire legal profession in general. Hearing that someone won his or her case “on technicality” basically means that the lawyer found some creatively underhanded way of stretching the law to win the case even though the client was clearly morally wrong.

And when insurance companies win on technicalities, people feel even more strongly, because many people don't like insurance companies to begin with. 

Of course, lawyers argue that legal technicalities is part of what makes are legal system stand out—unlike some more repressive countries, we won't just ignore or toss laws aside when inconvenient. In other words, Americans “win” on technicalities as much as we “lose” on technicalities.

Whatever you think, technicalities matter in the law, and they definitely mattered in the Court's recent decision in Koren v. State Farm Fire and Insurance Casualty Company.

Factually speaking, the Koren case is simple. A young boy was injured in Spokane County when two school buses collided. The boy's family had insurance through State Farm, and the family filed a claim with State Farm for PIP benefits. (PIP stands for personal insurance protection and it covers your medical bills, lost wages, and may even cover transportation to your medical appointments. If you have PIP insurance, your insurance company pays these bills regardless of whether the accident was your fault—that's why it's often called “no fault” coverage.”

But State Farm denied the family's PIP claim. Under the family's PIP policy, State Farm was required to pay for benefits for any “bodily injury” caused by an “automobile accident.” For purposes of PIP insurance, an automobile means a “motor vehicle registered or designed for carrying ten passengers or less.” Therefore, no car was involved, so no coverage.

The Courts agreed. Although it took the Court eight pages to get there, its analysis was basically this: the family's PIP covered automobile accidents, and a school bus is clearly not an automobile. Furthermore, Washington state law clearly states that a standard capacity school bus does not qualify as an automobile. The fact that the boy was injured in an “accident” was irrelevant because he wasn't injured in an “automobile accident.” In short, State Farm properly denied PIP coverage.

From an unemotional legal standpoint, the decision makes sense. (Clearly, buses aren't typical cars). And clearly, the Court didn't rule that the family didn't have a claim—they can and probably did sue the bus driver and the school's insurance carrier for damages and to be reimbursed for all medical expenses.

But parents may rightly wonder why PIP coverage doesn't cover ALL motor vehicle-related accidents, regardless of the size. But in Washington, as in most states, the law lives, grows, and develops in technicalities, and this case was no exception.

About the Author

Brian C. Zuanich

I am the managing partner at Zuanich Law. I am a former prosecutor and insurance defense attorney, and have practiced law in state and federal courts for over a decade.


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