Claim against me over policy limit

by CJ

I was found at fault in an auto accident a few months ago. I just received a call from my insurance company that the other driver has a $30,000 bill for being taken to the hospital the night of the accident.

The other driver was released with no injuries and was able to get back to work immediately. My policy limit for medical coverage is $20,000. I am unsure about the other driver's insurance coverage.

My understanding is that either they take the 20,000 and that's it, or they sue me for the entire 30,000. Is there a way for me to offer the difference of 10,000?

I am assuming the worst and that the Other driver does not accept the 20,000, my insurance company would probably not mind saving 20,000, so they have no incentive to put up a fight. Is this likely?

Thank you in advance for your response, I appreciate you taking the time to help.


Answer:

Hi CJ,

well, if I am following your question correctly, you caused $30,000 worth of damage (medical bills), but you only have a liability limit of $20,000, so you are missing $10,000.

Couple of things here.

1. You insurance company must do everything on their power to defend you (hiring and paying an attorney, the cost of defense is not included in your $20,000). A $30,000 medical bill seems very very high considering that the person went to work the next day. Even if the bill is for an air lift, the bill seems high. Your insurance company will review the bills and make sure they are all REASONABLE AND NECESSARY. This could discount the bill to that amount.

2. Your insurance company has an affirmative duty to settle your claim within policy limits. They must do everything in their power to settle within that $20,000.

3. If they cannot settle for the $20,000, you would be responsible for the excess $10,000. This is problematic. you must be able to either pay cash or they are going to go after your assets (house, car, wage, etc), assuming they want to go after you.

4. The other person insurance company will pay the medical bill (assuming they have medical payments and/or pip coverage), whatever that insurance company pays, they will go after you (subrogate) for the payments they had to made.

5. It is important to note the following. A $30,000 bill does not mean you only owe $30,000. Remember, they are entitled to pain and suffering and general damages visit:
http://www.auto-insurance-claim-advice.com/bodily-injury-claim.html.

for more information about the claims they can make against you.

The best thing for you is to contact your own insurance adjuster and discuss all your options with them. Get to the bottom of why that bill is so high.

Good Luck.

Follow up Question:

Thanks again for your reply, I am just very nervous that I can be held responsible for the full 30K bill if the insurance companies are unable to settle within my policy limits.

So, regarding point number 3 that you made, this happened in California and my understanding is that laws there are a little different. '

Assuming the 30K bill is legitimate (which I assume my insurance will research thoroughly) then is there any way that I will be responsible for the entire 30K, or is it safe to say that the most I will be responsible for is the difference between my policy limit and their claim?

Last, in response to point number 1, I was wondering if you could ballpark a "worst case" emergency room visit cost - ambulance, mri, ct scan, overnight stay.

Again, thank you for your help!


Answer:

Thanks for the comments and rating.

Regarding your follow up question, your 20K coverage is absolute. This means that if the insurance company cannot settle, then you would owe the difference.

They would provide the 20K and you would have to pay the difference out of pocket (10K). So you have 20K on "your pocket". The most you would be responsible for is the difference.

It is very difficult for me to give you a worse case scenario. I have no information to make that assessment. California is an expensive state and medical care can be more expensive there.

The most expensive emergency visit that I handled was $12,000 and that included an air lift and a very serious injury (as in a coma). Now, that was just the emergency room, this fellow had to be on the hospital close to three months and the bill was more than that.

But the emergency room was that much. Again, I am not sure if that is helpful, but that is what I can tell from here.

I hope this helps,

Good Luck.