If you have been injured in an accident, in one form or the other insurance will come into play. Questions often arise concerning how insurance works, who pays for what, and how insurance issues impact your case. Please feel free to call or email us with any insurance questions you may have.
Who Pays For What?
Ultimately, the party who is at-fault for causing an accident is responsible for all of the economic and non-economic harms and losses caused. These damages include obvious items like lost wages and medical expenses as well as less obvious harms items like inconvenience, emotional distress, physical impairment and pain and suffering.
The primary source of compensation for injured parties comes from the at-fault party’s insurance policy. In Colorado, individuals are required to carry a minimum of $25,000.00 of insurance coverage. Finding out how much coverage the at-fault party has, however, is not as easy as you might expect. Unlike other states, in Colorado the at-fault party is not required to disclose available insurance coverage until a lawsuit is filed. If and when that occurs, the defendant must disclose available insurance within 30 days.
Issues sometimes arise when multiple people are hurt and there is only a limited amount of available insurance. Insurance policy limits are phrased in terms like $100,000/$300,000. What this means practically is that the insurance provides a maximum of $100,000 per person and a total of $300,000 per incident. If a family of four were seriously hurt in this situation, there would be a total of $300,000 in available coverage for all injured parties.
Generally, if the at-fault driver was “on the job” when the accident occurred, the employer is responsible for the driver’s negligence through a legal concept known as Respondeat Superior. When this occurs, the employer’s liability insurance policy usually provides coverage. These “general liability policies” often carry one million dollars or more in insurance coverage.
As you can imagine, there are many situations when the defendant’s insurance policy is not enough to fully compensate for the damages caused. There are several options available when this unfortunate situation occurs. First, you can attempt to collect from the at-fault driver personally. Here is one example:
Mr. Fuicelli handled a case in which the at-fault driver, who happened to be drunk, turned left on a red arrow and caused very serious injuries to Keith’s client who was on a motorcycle. Making a bad situation worse, the defendant carried only 100,000.00 in available insurance. The defendant’s insurance company, Country Companies, very quickly offered to settle the case (completely releasing the at-fault driver of any personal responsibility) for the $100,000 policy limits. When Keith checked the driver’s assets, however, it became clear she had significant equity in her home to pay any judgment. After a few months of intense litigation, the at-fault driver took out a mortgage on her home which she owned free-and-clear and wrote a check for an additional $100,000.
Uninsured and Underinsured Motorist Coverage
As you can imagine, there are many situations where the at-fault party does not have enough insurance, or none at all, to fairly compensate the injured parties. If this occurs, “uninsured/underinsured motorist” coverage often comes into play.
Uninsured/Underinsured motorist coverage is “first-party insurance coverage” meaning the contract of insurance exists directly between the injured party and his or her insurance company. Although not mandatory, most insurance polices issued in Colorado contain this coverage. Such coverage generally “stacks” on top of the at-fault party’s insurance policy increasing the total amount of available compensation.
It is imperative to investigate any sources of available insurance before resolving a case. Many times uninsured/underinsured coverage on other vehicles in the injured party’s house will provide coverage.
How Does Health Insurance Come Into Play?
In July of 2003, Colorado switched from a system of “no-fault” automobile coverage, to a “tort” based system. Practically speaking, your health insurance now provides the primary source of payment for medical treatment in the event you are injured in an accident.
Based on our experience, in some cases the at-fault party’s insurance company may initially offer to pay all of the medical bills incurred as a result of an automobile accident. This, unfortunately, rarely occurs. Instead, the insurance company will later inform you that they will outstanding medical bills only ONCE you settle your case. In the mean time, medical providers may threaten to send your medical bills to collection agencies. These insurance companies, at times, use the outstanding medical bills as an incentive to try and get the injured party to settle for pennies on the dollar.
As mentioned above, if you have health insurance it provides the primary source of funding for your accident related medical treatment. In most cases, your health insurance company will assert a “right of subrogation” or “right of reimbursement.” This means that your health insurance company will likely argue it has the right to be paid back from the proceeds of the case. This can become a major issue if a situation arises in which there is not enough insurance to fully compensate all of the parties. When this occurs, the “make whole” rule may provide some relief.
Disputes involving how much money the health insurance companies are paid back have become increasingly complicated. It is important that you hire a law firm, like Fuicelli & Lee, PC, who have expertise in the area of subrogation and will fight to protect your rights.
What if I Do Not Have Health Insurance?
More than 20% of Americans are without health insurance and this number continues to rise. If you have been injured in an accident and do not have health insurance, you may find that obtaining quality treatment for your injuries is difficult. There are solutions and we encourage you to please call or email us as quickly as possible to discuss your options.
As mentioned above, the at-fault party’s insurance company will usually not pay for your medical treatment until your case is settled. One of the reasons they do not pay up front for your medical care is that the less medical treatment you receive, the lower the value of your case. Thus, if the insurance company is aware that you do not have health insurance and knows that your medical bills are being sent to collection agencies, they understand that you will likely be willing to settle your case for far less than full compensation. You might even be willing to settle your case before diagnosing the seriousness of your medical condition (saving the insurance company large amounts of money).
There are solutions to this increasingly common problem. Fuicelli & Lee, PC works with a network of medical providers who can treat your injuries on a “lien” basis. This means that the medical providers will wait until your case is resolved to be paid for their services. Using these providers allows you to receive the medical treatment you need without the fear of your medical bills going to collection.
If you have any questions about your medical treatment and who will pay for what, please call or email Fuicelli & Lee, PC today. The lawyers at Fuicelli & Lee, PC are here to help.
