If my insurance company pays for my medical bills after I have been injured, do I still have to pay back my insurance after I settle my bodily injury claim?

Following your injury, your automobile insurance and/or your health insurance carrier may have paid medical bills on your behalf. And now you are in a position to settle with the opposing insurance company for your bodily injury claim (which will include payment to you for your medical bills incurred). When you eventually settle your bodily injury claim with the responsible insurance company, you are responsible to pay back your auto insurance company and/or health insurance company the amount they paid towards your medical bills. Insurance companies have a legal right to be paid back for the amount they paid towards your medical bills. This obligation to pay back your insurance companies is referred to as “subrogation” or right to be paid back.

Why do you have to pay back your automobile or health insurance company for the amount they paid toward your medical bills when you paid a premium for this amount of coverage? The reasoning is that if you or your provider were paid for medical bills incurred from insurance and you subsequently collect that amount from the responsible insurance company in a settlement for bodily injury, you would essentially be recovering twice for the same medical bills; first from your own automobile insurance carrier and second from the insurance company responsible for the accident.

Your automobile insurance company’s policy protects their interest in getting paid back by inserting in your automobile/health insurance contract language protecting their right to be paid back the amount they paid towards your medical bills in the event you recover the medical bills from any other responsible insurance company. This is commonly known as a “subrogation clause”. And by you contractually agreeing to accept the terms and conditions of your automobile/health insurance, you have already agreed to pay them back in the event you recover from any other liable insurance company.

At Alvine|Weidenaar we will ensure your medical bills are paid timely while you are recovering. We will then pursue the liable insurance company for payment of all your damages including the medical bills incurred along with payment for any permanent injury, lost wages, pain and suffering and loss of enjoyment of life you have suffered as a result of the accident. We will then negotiate with any insurance company, whether it be your automobile insurance company or health insurance company, the amount you will need to pay them back. Often we are able to negotiate a reduction in the amount you owe them. Our ability to negotiate a lower payment eventually saves you money, increasing the amount of money you get to keep in your pocket maximizing your recovery for your bodily injury claim.

By Grant Alvine, J.D.
ALVINE WEIDENAAR LLP