GEICO ordered to pay $5.2 million after woman gets STD from having sex with her then-boyfriend in his car. They’ve already lost an appeal that the arbitration wasn’t valid even though one of the appellate judges stated they were offered “no meaningful opportunity to participate” in the lawsuit and existing law “relegat(es) the insurer to the status of a bystander.”
Steve Lehto’s take
Perhaps she claimed that she only contracted the STD because he crashed into her?
This silliness seems to hinge on the technicality that GEICO for some bizarre reason agreed to arbitration and that you can’t appeal an arbitration decision except for specific reasons like fraud. GEICO’s big problem here seems to be that despite the ridiculousness of the claim and despite any clarity that it doesn’t fall under the terms of coverage, they’re not allowed to relitigate an arbitration ruling.
It’s unclear why they didn’t just stick with their claim denial and then just fought it in court if the woman took it that far. Perhaps they understandably felt that no sane arbitrator would side with the woman.
I feel robbed I mean i could have sued when I caught lice (twice in the same month) on the dumb school bus that the district said was spotlessly cleaned every week? (note they lied)
damn I feel cheated
Did they have that option? Many arbitration clauses are compulsory
I don’t know the answer to that, but I can’t imagine what circumstances would have triggered a compulsory arbitration clause. My buddy was an auto insurance adjuster for many years dealing exclusively with major personal injury claims, and contentious cases always ended up in court.
GEICO agreed to the arbitration. They assumed the incident wasn’t covered by the insured’s policy and arbitrator wouldn’t award any payment. But the arbitrator felt GEICO should cover the incident, awarded payment, and GEICO had no other steps to take in the legal process at the state level because they agreed to the arbitration. So they’re going to federal court to try to get the messed up situation thrown out. At the heart of the problem was GEICO’s failure to explicitly state in their policy that it did not cover STDs transmitted in the a cover car. So it sounds like they’ll try to get the feds to say that no car insurance policy has to explicitly state that.
Actually I suspect the problem is that it didn’t say more generally that injuries unrelated to operating the vehicle were not covered.
Either that or it did say that and the tribunal got it wrong.
I wonder if someone who has a heart attack in a car covered by GEICO could sue also.
How are arbitrators picked? Does the insurance company have to agree? If so, that arbitrator is going to find it very hard to get work again.
I would guess that for many policies, someone hitting their head getting in or out of the car, or tripping over an obstruction in the doorway and falling on the sidewalk, the insured would be covered if the party decided to sue. I’m pretty sure I’d be covered, if only because I have an extended “umbrella” policy increasing the scope and amount of personal injury coverage. ISTM the real issue in this case is that the vehicle was in no way involved in the injury. She got the STD from the boyfriend, not from the car. That’s what makes this ruling so incredibly asinine. Anyway, sounds like it’s still a long way from being settled.
Wow. $5 million? I…uh, need to find someone with herpes right now. Oh wait, I switched from Geico to AAA in January. Sigh…
I keep thinking that maybe this was all a joke, but no, it’s real. The CNN article below confirms the technicality on which the rejection of GEICO’s appeal rests, namely this:
The three-judge panel responsible for reviewing the appeal confirmed the circuit court’s settlement decision of $5.2 million, despite GEICO’s appeal efforts, according to Tuesday’s filing.
“At the time of Geico’s intervention, liability and damages had been determined by an arbitrator and confirmed by the trial court. GEICO had no right to relitigate those issues,” the opinion stated.
The panel also wrote that Geico could have defended its interests by entering a defense of the insured individual. “GEICO did not take advantage of this opportunity, and instead denied coverage and refused to defend Insured,” the opinion said.
ETA: It occurs to me – isn’t it really unusual to have a policy with a liability limit of more than $5 million? Most are $1 million or less, or at most, capped at $2 or $3 mil.
https://www.cnn.com/2022/06/09/us/geico-insurance-std-settlement-missouri/index.html
Where I’m from those sorts of injuries would be considered to arise from operation of the vehicle.
Bonking in the backseat not so much.
This is on a par with the woman who attempted to claim on her holiday insurance because she got pregnant during the vacation.
Her case was that she and her partner had specified twin beds and the hotel only had a double so she was forced to share.
Even with lower limits, GEICO might be responsible for the whole judgment for it’s bad faith refusal to tender a defense. If they breached that duty, and their insured got clobbered in court (arbitration) they could be on the hook for it (state laws vary) In most places the “duty to defend” is broader than the duty to indemnify, and if you’re sued your insurance company is supposed to defend you, if there is any possibility that the claim is covered. If they refuse, they do so at their own peril. They easily could convert a $100,000 policy limits case into a $5M obligation.
This right here is the FU GEICO moment. Big companies with lots of lawyers love to force binding arbitration on their hapless customers, screw them over with favorable decisions, and walk away knowing that there’s zero legal option for their customer to get a new ruling.
Right. That’s how they screwed themselves in this case, they lost big time in the arbitration and now they’re the ones stuck up shit’s crick.
This was clearly a deep pockets approach to go after the car insurer instead of the insured personally. If this doesn’t work and he as a general liability policy such as with homeowners insurance the injured could take this approach again, either initially or after winning a lawsuit. I’m thinking the insured doesn’t have a policy like that or they would have tried that first.
If a court holds that car insurance must cover transmission of diseases inside the car then the courts are going to by flooded with cases going as far back as the law will allow. Don’t know if the general lack of knowledge of such coverage will extend the time before laches prevents a suit.
Is this going to mean an STD test before people renew their auto insurance?
Hell, just think about how many people caught (or believe they caught) covid from someone they were riding with.
I read the actual decision - and someone please correct me if I am wrong but it seems that not only did GEICO not agree to the arbitration, but GEICO was not even a party to the arbitration.
It seems that at some point, the woman approached GEICO with her claim and proposed a settlement. GEICO denied coverage and the woman and the insured agreed to arbitration , presumably after she sued him. After the award GEICO tried to intervene and appeal - but I’m not sure how they would have had a basis to intervene or appeal if their position was and is that the incident wasn’t covered under the policy
And that apparently still is GEICO’s position
Correction: An earlier version of this story erroneously stated that the decision by the Missouri Court of Appeals meant insurance company GEICO must pay the judgment claim. The insurance company is still contesting the decision in federal court, arguing that the claim is not covered under the policy.