New York, N.Y. (March 17, 2021) - New
York's Appellate Division, Second Department recently issued
a decision in Alleviation Medical Svcs. v. Allstate Ins.
Co., 2021 N.Y. Slip Op. 08159 (App. Div., 2nd Dept.
2/24/21), which was anticipated to specifically address the issue
of whether an insurer would be required to pay in excess of the
$50,000 policy limit if a court or arbitrator determined that a
previously denied claim should have been paid. In New York, the
Appellate Division is a higher court than the Appellate Term and,
thus, its decisions take precedence over Appellate Term
decisions.
Prior to the decision in Alleviation, this policy
exhaustion issue was not clear-cut. The lower civil courts have
been split on the issue and arbitrators generally rule in favor of
insurers and third-party administrators on a policy exhaustion
issue. With regard to the latter, as long as the insurer provided
the relevant Declarations Page and PIP payment log demonstrating
that
