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New Jersey Supreme Court allows Allstate to pursue PIP fraud claims in court
The court held that New Jersey's PIP arbitration framework under AICRA covers limited benefit payment disputes, not complex fraud claims seeking broader remedies.
New Jersey's Supreme Court ruled on July 21, 2026 that insurers may pursue insurance fraud claims in court, rather than being limited to the narrower arbitration process designed for routine personal injury protection, or PIP, disputes. The decision affirmed a lower court ruling and keeps Allstate’s fraud case with a jury.
The dispute began after six related Allstate companies sued a group of New Jersey medical practices and physicians. Allstate alleged the defendants conspired to obtain more than $1.7 million in PIP benefits through fraudulent and misleading medical claims, allegations that have not yet been proven.
At issue was whether New Jersey’s Automobile Insurance Cost Reduction Act, AICRA, required the claims to go to arbitration. The trial court initially dismissed the fraud claims and ordered arbitration, but the Supreme Court agreed with the appellate decision that the fraud claims do not fall within the scope of AICRA’s PIP arbitration.
In its reasoning, Insurance Business reports the court pointed to remedy limits in PIP arbitration, including that PIP arbitrators cannot grant equitable relief and raised serious questions about whether they could award certain damages or fees available under New Jersey’s Insurance Fraud Prevention Act and the state’s anti-racketeering law. The court concluded that the existing PIP arbitration setup is designed for limited disputes over timely payment of PIP benefits, not complex insurance fraud claims, and it said claims under the Fraud Act or RICO do not fall within the PIP arbitration ambit under AICRA.