Insurers Cheer California Supreme Court Settlement Ruling

The Association of California Insurance Companies (ACIC) is lauding a decision by the California Supreme Court that centered on the question of whether a plaintiff’s settlement damages should be based on the higher amount billed by a medical provider or the actual amount paid for by the insurer as agreed to by the medical provider.

Along with other insurance trade associations, the ACIC filed an amicus brief in the case, Howell vs. Hamilton Meats & Provisions Inc., which argued that damages in such cases should be based on actual costs paid.

“The Court correctly concluded that the actual amount paid by the insurer should be the basis for damages,” ACIC VP Armand Feliciano said in a statement. “This ruling will ensure that parties receive damages based upon the actual amount paid to a medical provider, instead of a random inflated price that was never paid to anyone.  If this case had been decided for the plaintiff, property/casualty insurance companies would have been required to pay damages based on inflated costs that were never incurred and this could have caused auto or homeowners insurance premiums to increase.”

The ACIC is an affiliate of the Property Casualty Insurers Association of America.