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Why Your Health Insurance Hates Your Car Accident

by Personal Injury Claims Blawg on April 24, 2012

Below is a guest personal injury law article regarding health insurance and car accidents from Rick Console, a New Jersey personal injury attorney. Rick is the founding partner of Console and Hallowell P.C., an award-winning law firm representing accident victims across New Jersey and Pennsylvania.

Private health insurance is a job perk for many employees across the United States. The access to affordable healthcare helps prevent and treat a number of illnesses that might have gone unattended otherwise. In New Jersey and other states across the country, you have an option to declare private health insurance coverage as your primary care provider in a car accident. This declaration means private health coverage pays for related medical expenses before personal injury protection or PIP coverage under your auto insurance.

The choice can make it easier for your family doctor to submit insurance claims for payment, but you also give your health insurance provider rights to your settlement money.

In any car accident, it’s important to have an experienced legal team on your side. Competent attorneys act as shields between you and insurance companies or healthcare providers trying to force you to pay inflated medical bills or get you to agree to settle your case for a smaller dollar amount. For example, a New Jersey man sustains serious injuries in an accident involving a tractor-trailer. He’s elected his private health insurance as the primary insurer. The Newark truck accident attorneys in charge of his case can work with his health insurance provider to reduce his medical bills relating to accident. This action increases the total settlement he can receive from his personal injury claim.

What is Personal Injury Protection Coverage?

Personal injury protection or PIP coverage is a selection under your auto insurance policy that pays for medical expenses that treat your related injuries. PIP coverage through your auto insurance is the default primary insurer when you’re in a car accident. Choosing to switch that coverage to your private health insurance involves an entity that doesn’t have the legal obligation to pay for your crash-related injuries that your PIP coverage carries. Because of this, your health insurance has the right to claim a portion of any settlement you receive to recoup expenses related to your treatment. In New Jersey, the minimum required personal injury protection coverage for auto insurance is just $15,000.

In a car accident, ambulance services and other emergency care can easily exhaust the limitations of an auto insurance policy with only the minimum PIP coverage. Increasing the maximum coverage under an auto insurance policy into the $100,000 range doesn’t substantially raise monthly/yearly premiums. Paying a couple hundred dollars extra per year in insurance is a small price in the face of six-figure medical bills.

Health Insurance Collection Practices

If you select your health insurance policy as the primary coverage for medical expenses in an accident, your health insurance provider may file a medical lien against you to ensure the company receives proper compensation. A medical lien is a form of security interest used to guarantee payment for a debt – in this case, the medical bills from your car accident. Unless you act to reduce or eliminate the lien, the action reduces your civil settlement by the lien’s total amount. If the lien is larger than your settlement, you may receive zero compensation. To avoid this circumstance, declare your PIP coverage as your primary care provider for auto accident injuries. Once your bills for your injuries exhaust your PIP insurance, your private health insurance can handle the remaining balances.

PIP coverage is there as part of your auto insurance solely to pay for medical expenses resulting from an auto accident. Failing to take advantage of this coverage allows your insurance company to take your premium money each month without having to payout a dime when you’re hurt. Using PIP coverage doesn’t entitle your insurance company to any portion of a settlement you may reach in connection with your accident. Retaining a larger portion of your settlement is important to replace your lost income and restore your quality of life. The last thing you want is for everyone else to profit from your misfortune and leave you to pay the bill.

Personal Injury Claims Blawg

Personal Injury Claims Blawg

PI claims blogger at PIClaimsBlawg
Personal Injury Claims Blawg is a personal injury law blog, inviting contributions from practitioners, PI law firms and legal academics across the UK, US and beyond. The post above has been published because of the high value associated with the author's work. Contact us if you'd like to get published today.
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