If you’ve been injured in a car accident was caused by another driver’s negligence, you are likely wondering who exactly is responsible for paying your medical bills related to the car accident—the at-fault driver’s auto insurance carrier? Your auto insurance carrier?
Many of our clients are surprised to learn there is nothing in Tennessee law that requires the at-fault driver’s insurance carrier or your own uninsured/underinsured motorist insurance to pay your medical bills after a car accident.
At-Fault Driver’s Insurance Carrier
The adjuster for the at-fault driver’s insurance carrier will often tell injured claimants to “send me your medical bills as you receive them,” and then they usually follow up with something to the effect of “we will make this right” or “don’t worry, we are accepting liability.” This kind of misleading rhetoric from adjusters leads claimants to believe that the at-fault driver’s insurance company will pay their medical bills related to the accident upon receipt. This is not true. The at-fault driver’s insurance company will not piecemeal settlement monies by paying your individual medical bills. The insurance company for the at-fault driver will not pay out any money on your injury claim unless you agree to release their insured from any and all liability. In other words, they don’t pay you a cent until your entire injury claim is resolved.
Underinsured/Uninsured Insurance Coverage
If the driver that hit you was uninsured or underinsured, you may be dealing directly with your auto insurance carrier regarding your injury claim. Similar to the at-fault driver’s insurance carrier, your uninsured/underinsured motorist coverage will not pay individual medical bills prior to the resolution of your injury claim.
Medical Payment Coverage
On the company’s website, Allstate defines medical payment coverage as follows:
Medical Payment Coverage is part of an auto insurance policy. It may help pay your or your passengers’ medical expenses if you are injured in a car accident, regardless of who caused the accident…Medical payment coverage is sometimes referred to as medical expense coverage or just “med pay.”
Medical Payment Coverage is the only type of auto insurance coverage that will pay your medical bills upon receipt prior to the resolution of your injury claim. Typically, medical payment coverage has a policy limit of $5,000 or $10,000 per person. Whether or not you should use your medical payment coverage to pay your medical bills after a car accident can be a somewhat complicated issue.
Tip: Regardless of whether you decide to use your medical payment coverage or not, one of the first things you should do after a car accident is notify your auto insurance carrier in writing NOT to make direct payments to any medical providers under your medical payment coverage without your explicit approval.
This prevents the emergency room or hospital that treated you after the accident from using part or all of your medical payment coverage. Going straight for an injury victim’s medical payment coverage is the hospital’s way of collecting 100% of the total charges without having to give the contractual discount they have to give your health insurance carrier or even the self-pay discount they automatically give all patients that are uninsured (which is often 50% of the total charges). The reason this is so important to someone injured in a car accident is because any monies paid to health care providers through medical payment coverage or health insurance are subject to what is known as “subrogation” (often referred to as subro).
Subrogation
Basically, subrogation means if your health or auto insurance carrier makes payments on your behalf to cover medical expenses or other damages that are related to the car accident, it is legally entitled to reimbursement of those payments from any settlement you receive from the at-fault party.
Here’s an example of how subrogation could impact your settlement:
Jack and Jill were injured in a car accident that was not their fault. They both go to the emergency room after the accident and incur $10,000 in charges. They both have health insurance and also have $10,000 in medical payment coverage under their auto insurance. They each receive a $30,000.00 settlement from the at-fault driver. However, Jack’s net recovery from the settlement is $27,000 and Jill’s net recovery from the settlement is only $20,000. So why did Jack receive $7,000.00 more than Jill despite having identical medical bills and receiving identical settlements from the at-fault driver? The answer is that Jack’s $12,000 emergency room bill was submitted to his health insurance, who received a contractual discount, which brought the total charges down to $3,000. This means that out of his $30,000 settlement from the at-fault driver’s insurance company, Jack only had to pay $3,000 in subrogation to his health insurance carrier, leaving him with $27,000 in his pocket. On the other hand, Jill’s $12,000 emergency room bill was submitted to her auto insurance and paid under her medical payment coverage, so she received no contractual discount and paid the full $10,000 available under her medical payment coverage directly to the hospital. Basically, out of Jill’s $30,000 settlement, she was required to pay $10,000 in subrogation to her auto insurance company, leaving just $20,000 in her pocket, even though the actual settlement amount was the same as Jack’s.
As I’ve mentioned in previous articles, the best way to get your medical bills paid after a car accident is to submit them to your health insurance carrier. For an in-depth explanation, read “Why You Should Submit the Medical Bills From Your Car Accident to Your Health Insurance ASAP.”
Car accident victims who mistakenly believe that the at-fault driver’s insurance company will automatically pay their medical bills when they send them to the carrier are often unpleasantly surprised to learn those same medical bills have been turned over to collection and their credit score has dropped significantly. If you are injured in a car accident and don’t have health insurance, it’s a good idea to contact the medical providers directly to set up a payment plan so you can avoid having the bills turned over to a collection agency.