What Do You Mean It's Not Covered: The Policyholder Got His Money but Ducked His Bills

Despite all of this, Cramer didn't pay his health care providers either from the insurance proceeds he had received from State Farm or otherwise. Consequently, he sought additional medical expense benefits from State Farm pursuant to the CMER. State Farm denied coverage. By letter dated February 1990, State Farm explained that since Cramer had not incurred any out-of-pocket expenses, and in fact had received benefits in excess of his medical expenses, he had not met the threshold amount entitling him to benefits under the CMER. Dissatisfied with this response, Cramer sued, alleging tortious breach of contract, breach of fiduciary duty, unfair settlement practices, and fraud. He sought compensatory and punitive damages. After a year of discovery, State Farm moved for a summary judgment dismissing Cramer's claims. It argued that coverage under the catastrophic medical expense rider was precluded because Cramer had not satisfied the threshold amount. Also, it argued that it wasn't liable for bad faith or punitive damages because it had reasonably interpreted its CMER to preclude coverage.