Claimant Must Continue to Submit NF-7s for Lost Wages Even After Denial

Applicant_1 and Allstate Insurance Company

AAA Case No. 412009001188, Arbitrator Veronica K. O’Connor
Amount in Dispute: $30,000, amended to $260,000
Award Date: 03/01/10
Award: $8,000

Here, the eligible injured party was set to begin a contracting job on October 2, 2007 for $2,500 a week.  The EIP was then injured in a motor vehicle accident on October 2, 2007… after completing 2 and 1/2 hours of work on the job.  He did not return to work and submitted a claim for lost wages to the insurer.

The insurer conducted an Examination Under Oath of the EIP and subsequently denied his claim for lost wages for “Failure to make a prima facie entitlement to lost wages” and “material misstatement of facts.”

Arbitrator O’Connor held that this denial was inappropriate as the insurer had not provided sufficient proof that the EIP materially misstated the facts or that he failed to establish his lost earnings claim.

The EIP’s claim was for 10/02/07 to 10/02/09.  However, the EIP had only submitted one NF-7 (Verification of Self Employment form) to the insurer.  This form, dated 12/03/07, stated only that he would be unable to work from 10/02/07 to 01/14/08.  The EIP did not submit another NF-7 beyond that date, presumably because the insurer had denied the claim after the EUO.

The arbitrator first cited to the Regulation, which states:

The eligible injured person or that person’s legal representative shall submit written proof of claim for work loss benefits and for other necessary expenses to the Company as soon as reasonably practicable but, in no event, later than 90 days after the work loss is incurred or the other necessary services are rendered. The foregoing time limitations for the submission of proof of claim shall apply unless the eligible injured person submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.

Here, the EIP did not submit any NF-7s after 01/14/08, within 90 days of having incurred that alleged work loss, nor did he submit any written proof providing justification for failure to do so.

Next the arbitrator quoted the Opinion Letter of the Office of General Counsel dated September 2, 2004:

Neither does the statute or regulation relieve an applicant for benefits of their responsibility to submit claims in order to be eligible for the payment of benefits, even after receiving a denial of all future benefits.

Arbitrator O’Connor held that the EIP was not relieved of his responsibility to continue submitting proof of his claim, even after the insurer issued a denial in January of 2008.  The arbitrator was thus, only able to award the EIP lost wages for the period of time listed in the only NF-7 he submitted, resulting in an award of only $8,000 on his $260,000 claim.

Note: there is no real explanation as to how the EIP calculated his lost wages at $260,000.  His original claim, for $30,000 is closer to the mark, though he still would have only qualified for $48,000 (with a $2,000 a month policy limit) had the arbitrator been able to give an award for the entire time claimed.