In Virginia; I was injured in an accident and won my settlement from the person who hit me. Do I need to pay back my insurance company?
Question Details: Hello, I was recently in an accident where I won a small settlement from the person who hit me. My health insurance provider paid roughly $2400 for my medical bills. My attorney NEVER told me I had to pay them back from my settlement. Now a recovery agency is seeking reimbursement on behalf of the provider. When I asked my attorney he said that I do not need to pay them back in VA due to state law, even though my policy was written in New Jersey because they take me to court here. What will happen next? Can they legally put this debt on my credit report? I think I got bad legal advice.
Insurance Law Law Answers
The short answer is yes, you have to pay back the health insurance. If you won a settlement from the person who hit you because you filed a lawsuit, your health insurance provider is entitled to be repaid from any proceeds you win from the responsible party. This is known as "subrogation." Your health policy should have language in it regarding your obligation to repay.
This kind of debt does not go on a credit report because it has nothing to do with extending you credit. Ask your attorney to show you the Virginia law that specifically says you don't have to pay the money back. Health Insurance Plans are governed by Federal law (ERISA) and that would trump conflicting State law, if any.
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