Should a Personal Injury Settlement Cover Insured Medical Expenses?

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“We are trying to settle a personal injury claim based on an auto accident. The other driver was clearly at fault (she ran a red light) and her insurance company has admitted this. The insurance company has paid for our car, which was totaled, and we are currently trying to recover money toward the injuries sustained. My husband had knee surgery for an injury caused by the accident. He also had a shoulder injury that was treated only with physical therapy.

This is where it gets interesting and confusing. From what we understand we have the right to recover all incurred medical costs associated with the accident. The problem is the definition of “incurred.� We have a friend (an attorney) who told us that Texas law states that we cannot be penalized for having health insurance, meaning we should receive the money that was initially charged by the physicians, rather than the discounted insurance fee. This thought was corroborated by the two involved health insurance recovery companies (my husband’s injury recuperation occurred over a period of time in which his employer changed health insurance companies).

The offer by the auto insurance company (which, by the way, is also our insurer) was less than half what we had requested, as they based their numbers off of the discounted charges by the physicians, rather than the amount we would have paid if we didn’t have insurance.

Do you have any thoughts on this? Any help would be appreciated. Our attorney friend suggested we should probably avoid hiring an attorney (including him), as their fees would require we get a lot more money from the insurance company to offset their charges.”

I can’t speak for Texas law, but generally, personal injury settlements are intended to make a party whole again, at least financially. In otherwords, if your total medical bills are $200,000, but your out-of-pocket medical expenses are $100,000, then they would pay you $100,000. There is no reason why, from the expense standpoint, they should pay you $200,000 if you only had to pay out $100,000 yourself.

What you are suggesting is a legal scheme which would allow you to actually profit from your husband’s injury, which generally the law would frown on.

If things are that different in Texas, then you should definitely consult a Texas attorney.

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