Written by Troy Marsh |
If your own insurance company pays your medical bills, but someone else caused your injury, your insurance company may claim entitlement to part, or all, of the money you got from the other guy’s insurance company. For example, say you pay monthly premiums for a health insurance policy. While driving to work, someone runs a red light and hits your car, injuring your shoulder. You go to the ER, where they run some tests and give you some medicine. Your health insurance company pays the hospital and the ER doctor. Then, the other guy’s insurance company settles your case and sends you a check. Then, you get a letter in the mail from your health insurance company saying something like “You are required to reimburse us for all expenses we paid on your behalf, like medical bills.” In other words, PAY US BACK OR ELSE!
The scariest part is that you may not hear from your own insurance company until AFTER you have spent all of the settlement money! Guess what, you may not have to pay any money to reimburse your insurance company! Only in limited circumstances are injured parties required to reimburse health insurers. The federal and state laws governing liens and rights of reimbursement are complex and are constantly evolving and changing. Few lawyers understand ERISA (Employee Retirement Income Security Act), the federal law that applies in some situations. Even fewer are able to navigate the interplay between federal law and state law governing such claims. Be sure that your lawyer is one who stays abreast of the most recent legislation and appellate decisions in this complicated area of law.
2. Loss of consortium. If another person negligently injures you, and your injuries adversely affect your marital relationship, your spouse may have a separate claim for what’s called loss of consortium.
That means that your spouse may have a claim against the other driver for damaging his marital relationship with you. And, that’s true even if your spouse was not involved in the incident that injured you. Loss of consortium includes things like damage to intimate relations, society, and companionship. The scariest part is that most insurance companies will not tell you or your spouse about the loss of consortium claim. Usually, the insurance company will simply add your spouse’s name on the settlement check and require your spouse to sign the general release, which extinguishes the loss of consortium claim forever. Be wary of signing any document from any insurance company without having it reviewed by a qualified lawyer.
3. Punitive damages. In most injury cases, the money you receive from the other guy’s insurance company (called liability insurance) includes all types of damages, such as special and general damages (pain and suffering), and usually includes punitive damages. Punitive damages are designed to punish and deter, not to compensate for loss, in cases involving malicious, wanton, or willful conduct and in cases where the other person exhibited a conscious indifference to the consequences of his actions, like a repeat DUI offender. The bad part is that the insurance companies will not tell you that. Nor will they even tell you that you are entitled to punitive damages because it is not their job to look out for your best interest.
4. Vicarious liability. That means liability by virtue of a relationship, not because of negligent action. For example, an employer is liable for most consequences of her employees’ negligence during the course of the employment. While the employer/employee relationship is the most common type of vicarious liability, there are many others. However, once you settle your case, you may never seek additional money from those who may be vicariously liable and who may have additional insurance policies in effect.
5. Additional defendants. When you settle an injury claim, the insurance company will likely require you to sign a release. Sometimes the release will include names that are unfamiliar to you. Sometimes those names are people or companies that shared in the liability for your injuries, and by signing the release, you give up your right to collect any more money from them, even if they acted with malice or were consciously indifferent to the consequences of their actions. Remember punitive damages?
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