During the past year, we have defended insurance carriers from allegations that it is improper to have one claim representative handle both the underinsured motorist (UIM) claim and the personal injury protection (PIP) claim and to keep one file for both claims. We anticipate these allegations will continue in 2016, despite the fact that combined handling is permitted under Washington law. Therefore, we take a moment to address the current state of Washington law on the issue, which holds there is no requirement to split a PIP claim file from a UIM claim file. In fact, the two Washington cases addressing the issue have rejected the insureds’ arguments to split the files.
In Ki Sin Kim v. Allstate Ins. Co., 153 Wn. App. 339, 223 P.3d 1180 (2009), as amended (Jan. 6, 2010), Division 2 of our Court of Appeals held that Allstate was allowed to combine PIP and UIM files and consider the contents of a PIP file when handling a UIM claim and vice versa. In Kim, Allstate considered the same independent medical examination (IME) under both the PIP and the UIM investigation. Id. at 361-65. The court noted that the policy allowed Allstate to require Kim to submit to an IME under both the PIP and UIM coverage. The insured in Kim cited Harris v. Drake, 116 Wn. App. 261, 273, 65 P.3d 350 (2003) and argued that “‘confidentiality’ require[d] Allstate to conduct two separate and independent investigations into Kim’s UIM and PIP claim.” Id. at 365 n.9. Division 2 rejected this argument and held that the confidentiality principles that may prevent a third party from using a PIP IME against an insured did not apply when an insured is seeking PIP and UIM coverage from her insurer. Division 2 permitted the use of the same IME for PIP and UIM purposes.
In Haley v. Allstate, Ins. Co., Inc., 2010 WL 4052935, n.2 (W.D.Wash. Oct. 13, 2010), the court relied on Kim when it held “a claim for bad faith arising out of the comingling of Plaintiff’s MedPay and UM files would have failed as a matter of law.” The Court in Haley noted that a UM/UIM insurer stands in the shoes of the tortfeasor and would be able to compel an IME of the insured or compel discovery of an IME conducted for PIP/Medpay purposes. In Haley, the court also noted that the plaintiff had authorized Allstate to obtain medical information from “all persons with knowledge of [the insured’s] medical history.” Id.
Despite these two cases supporting the position that claim splitting is unnecessary, we continue to see demands from policy holders that insurers split the files and allegations that the failure to do so is bad faith. We have also seen arguments for file splitting in other, analogous circumstances (e.g., splitting a premises liability investigation from the medical payments file). Until there is a change in the law, there is no requirement in Washington that a PIP claim file be split from a UM or UIM claim file. That being said, we cannot rule out the possibility that on rare occasions splitting the PIP claim file and UM/UIM claim may be advisable.
