In a motor vehicle accident, is a lien on a settlement placed on the payer (insurance company) or payee?

My mother was involved in a MVA and all parties have acknowledged that it was the fault of the other party. Their insurance company has said they expect to pay out the maximum, but are waiting on us to get a lien amount from the health insurance company. Is this a stall tactic? Does the health insurance company place the lien against the payee (insurance company) so that they need to wait to see what the balance is before making payment or is the lien placed against the person receiving the settlement (in which case they should pay without delay)?

Asked on September 12, 2010 under Accident Law, Massachusetts


M.S., Member, Connecticut Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The general rule is the that the lien is usually placed against the person receiving the settlement.  However, the amount of the lien may be used by the insurance company to determine how much of the policy to pay out, and that may explain why they are waiting on it.  For example, suppose the policy is $20,000, and you have medical bills in the amount of $20,000 that your health insurance company has paid.  If the HIC is only seeking subrogation (the fancy term for the lien) in the amount of $15,000, then the mv insurance company may decide to only offer that amount, since you are not out-of-pocket on the remaining $5,000.  In any event, in your situation it sounds like you should insist on the policy either way.

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