Car Insurance Pays Lost Wages Even if Disability Insurance Pays!

Do insurance companies short people on purpose, or it it just ignorance?

I once had a Progressive Insurance SUPERVISOR say she had to know how much Short Term Disability had paid before she could issue a wage loss check, so she could reduce Progressive’s payment. “No no no”, I told her.

“But that’s how we always do it….” she complained.

I tried to explain that, just like health insurance, she had no right to coordinate benefits. You see, the disability company can reduce what they pay (called coordinating benefits) but not the no-fault auto insurance carrier.

“But your client can’t double dip!”

“Well, actually, the Supreme Court says he can…” Fact was, my client wasn’t ‘double dipping;’ the two benefits together still left him short. But the law doesn’t even allow the car company a credit if the injured person gets more than their wage…. it’s up to the disability insurer.

I was pasting the clip from my No-Fault Primer article into a fax to her when the message came back, “You were right, I’ll issue the check.”

How many people are getting shorted illegally? I think insurers get away with the stuff all the time. I see all sorts of stuff like this

So I’m posting the clip here so folks know:

Coordination. There is no set-off or reduction of benefits for payments made by other insurers, except workers’ compensation benefits actually paid. “Basic economic loss benefits shall be primary with respect to benefits, except for those paid or payable under a workers’ compensation law.” Minn. Stat. § 65B.61 (2008).

No-fault carriers have no right to coordinate benefits with accident, disability or health carriers.[1] Coordination of benefits by these other insurers is allowed, but not required. The Supreme Court has recognized and accepted that some double recovery may occur in these circumstances. Minn. Stat. § 65B.61, subd. 3 (2008). See Wallace v. Tri-State Ins. Co., 302 N.W.2d 337 (Minn. 1980) (health care benefits); Hoeschen v. Mutual Service Cas. Ins. Co., 359 N.W.2d 677, 679 (Minn. 1985). (army paid health care costs); Demning v. Grain Dealers Mut. Ins. Co., 411 N.W.2d 571 (Minn. Ct. App. 1987) (social security benefits). Minn. Stat. § 473.405 (1992), which gave the MTC (now MCTO) a deduction for most government benefits paid, has been repealed. (Laws 1994 Ch. 628, art. 3, §209(a)).