Who Pays Medical Bills In A California Car Accident?

If you have been in an auto accident in California, you’re probably dealing with a mountain of medical costs from your injury. The good news is that when it comes to auto insurance, California is a “fault state,” which means that the person who was at fault in your accident is responsible for paying your damages.

Getting that person to pay for your medical bills, however, is rarely straightforward. More likely, you will have to look to your own insurance or even pay out-of-pocket. Here’s an overview of how to get your medical expenses covered after your accident.

Ways To Get Car Accident Injury Bills Paid

Generally, you have the following legal options to get your medical bills paid after a crash:

  • File a claim with your own insurance. Many Californians have their crash injuries covered by their auto insurance or health insurance policy. If you have this coverage, you may use it instead of going elsewhere for your medical bills payment because this process is usually faster.
  • File a claim with the at-fault person’s insurance. California drivers are required by law to carry a minimum of $15,000 liability coverage. This is intended to cover other people’s injuries when a driver causes an accident. If you opt to claim from this liability coverage, the at-fault driver’s policy limits may affect the amount you could receive.
  • Sue the at-fault driver. In some cases, filing a personal injury lawsuit may be more advantageous than just making an insurance claim. You may consider this option if, for instance, you have severe injuries and your expenses will likely exceed insurance policy limits. Filing a suit may also be a strategic action if the at-fault driver’s insurance company keeps delaying or denying your settlement.

Though these legal remedies may be available to you, you will likely still need to pay bills out-of-pocket, at least during the period immediately after your accident. The at-fault person who is responsible for paying you is not required to pay your bills on an ongoing basis. In other words, they’re not expected to pay for each expense as it arises. Usually, you will have to shoulder your expenses first, then negotiate for a reimbursement (settlement) later.

Negotiations can take a long time. Don’t leave your bills unpaid for so long that you end up with collections that could harm your credit score.

When You Cannot Sufficiently Pay For Medical Bills: Medical Lien

California allows the payment of accident injury bills through a medical lien. A lien is a right to repayment once you get a settlement from your personal injury lawsuit. Essentially, you receive medical treatment ‘on credit’ while giving the medical provider or healthcare provider the right to be repaid from your lawsuit settlement.

Not all healthcare providers in California work on a lien basis. Typically, they might be willing to accept a lien if they see that:

  • you have no means to pay for your medical bills (e.g. no insurance, cannot afford deductibles or co-pays, and so on) and
  • your lawsuit is winnable.

A personal injury attorney may be able to help you find healthcare professionals who accept medical liens. Having a lawyer is also crucial for you to get a satisfactory settlement amount in your lawsuit – an amount that adequately incorporates liens with your other damages.

When You Need To Pay Back Your Insurer: Subrogation Rights

Similarly, health insurance providers may demand repayment for covering your crash injury treatment. They are able to claim this through their subrogation rights. When you receive a settlement or judgment from your injury lawsuit, the insurer can make a subrogation claim to get repaid for the expenses they covered.

It’s important to read your insurance policy thoroughly to understand its subrogation clause. You may be surprised that this clause exists not just in private insurance but in government insurance as well such as Medi-Cal and Medicare.

California law limits the amount that they can take under subrogation. If you engaged an attorney, the maximum subrogation is a third of your total settlement. If you settled without an attorney, the limit rises to half of your settlement.

This is only one reason why it’s important to have a lawyer when you pursue a personal injury case. Your attorney should be able to fight for a favorable amount for you while protecting you from unreasonable subrogation and liens. Choose an attorney who has proven to be an effective negotiator and is highly experienced with California auto insurance laws.

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