Reimbursing an Insurance Company After a Personal Injury Lawsuit

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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If your insurance carrier paid your medical bills for your injury, then they may be entitled to place a lien on the proceeds from your personal injury insurance settlement. Unfortunately, this would usually mean that they would have the first claim to the settlement money you receive. 

Understanding the Personal Injury Settlement Process

When you get into a car accident which is caused by another driver, in all but 12 states you have the right to collect your damages from that driver’s insurance company for either minor or serious injuries. In the remaining 12 “no fault” states, the rules are different and you generally must collect your damages from your own personal injury protection, unless your injuries are serious enough to be defined as exceptions under the no fault provision of the law. 

Assuming you do have the right to collect your damages from another driver, you can do so by either accepting an out of court settlement from his insurer or by filing suit. If you were to file suit and have a jury determine the appropriate damage settlement, the jury would consider:

  • Medical bills
  • Lost wages
  • Pain and suffering
  • Emotional distress

As such, if you are considering settling out of court, you should ensure that you are receiving compensation for all of these things. 

Why The Health Insurer Can Take Your Personal Injury Settlement

Since a part of your compensation is intended to pay your medical bills, it is only logical that the health insurer should be able to be reimbursed for the money they have paid out. However, things begin to seem less fair if your settlement is not large enough to cover both the medical bills and the pain and suffering and other damages. For example, if you got into a car accident where you had $40,000 in medical bills and the other driver had the minimum coverage of $25,000 in liability coverage, then the entire $25,000 would go to your health insurer, leaving you nothing.

In this case, your attorney may be able to negotiate a deal with the insurance company to try to come up with a more favorable solution whenever possible. You may also be able to turn to your own uninsured motorist coverage, if you have it. 

Getting Legal Help With Your Personal Injury Settlement

There are many different legal issues to consider when a car accident occurs, especially if you suffer serious injuries. If you’ve been injured in a car accident, you should consult with an attorney as quickly as possible for guidance and advice on resolving these issues. 

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