Farmers Insurance has reached a settlement to resolve a nationwide class action lawsuit. Although Farmers denies any wrongdoing, the insurer agreed to the terms of the settlement in order to “avoid ongoing litigation” and the significant time and monetary resources associated with that path.

In Re Farmers Med-Pay Litigation (CJ-2004-559), plaintiffs charged that Farmers failed to pay—either in whole or in part—“reasonable” expenses for necessary medical services under the medical payments (Med-pay) and/or personal injury protection (PIP) coverage outlined in their automobile policies. This alleged inadequate distribution of benefits was based on Farmers’ use of certain systems and procedures for adjusting claims for paying medical expenses incurred as a result of an auto accident.

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