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When There is Not Enough Money

The worst part of my job is talking with people who have been injured in a car accident and had damages in excess of the policy limits of the insurance carrier, but they chose to settle with the insurance carrier and pay the bills out of their own pocket. Their experiences have given them a strong distrust for insurance companies, lawyers, and the legal system. These people are very hesitant to call and speak with an attorney because they don’t want to spend any more money than they already have to resolve their claims. I understand and can completely empathize with this predicament, but there are ways that a good attorney can help.

Let’s use a fictional example with cost estimates: say Susan is rear-ended by a car who has the Oklahoma state minimum required liability insurance coverage of $25,000.00. The impact is so severe that Susan is taken by ambulance ($2,000.00) to the ER ($4,000.00) where she is seen by a doctor ($250.00) and has CT scans and x-rays of her neck, back, and shoulder taken ($500.00). She then follows up with her primary care physician as instructed ($150.00 per visit), is recommended to get an MRI of her shoulder ($1,800.00) and ultimately requires surgery to repair the tear in her rotator cuff ($40,000 for the surgical hospital, $3,000.00 for anesthesia, and $2,000.00 for the doctor). She then requires several months of physical therapy (totaling $4,000.00) and all the while is unable to work due to pain and restrictions from her doctor (off work for 4 months at $2,000/month = $8,000.00 total). Susan now has actual damages (those that can be easily calculated) of approximately $66,150.00. But the liability carrier only has $25,000.00 so Susan, due to no fault of her own, is in the hole by $41,150.00. Knowing this, Susan does not want to call an attorney and pay the attorney part of her settlement.

However, Susan does have options.

First, if Susan has UM/UIM or medical payments coverage under her own plan, this is exactly the time and place for her to use that coverage. To keep our scenario going, let’s say Susan had an additional $25,000.00 in underinsured (UIM) coverage as well as $5,000.00 in medical payments (med pay) coverage on her own insurance policy. Even with this additional coverage now totaling a settlement of $55,000.00, Susan is still in the hole by $11,150.00.

Susan’s second option examines her health insurance coverage. Let’s say she does have health insurance: her medical providers can submit their bills to her health insurance carrier for payment. Most often, insurance carriers and medical providers have contractual rates and the insurance will cover approximately 75% or more of the bill. Of that 75%, there is a smaller amount that is paid and a larger amount that is shown as a “write-off”. The health insurance carrier has a right to subrogation (a right to be paid back) for the amount they paid - but not the amount they wrote off. Let’s say Susan’s bills totaling $58,150.00 were all submitted to her health insurance carrier. The carrier paid $17,445.00, wrote off $26,167.50 and the providers balance billed the rest to Susan in the amount of $14,537.50. Provided that both insurance companies pay their limits totaling $55,000.00, Susan pays $14,537.50 to the medical providers and $17,445.00 back to her health insurance carrier. Susan now receives $23,017.50 as compensation for her lost wages and the pain and suffering she endured. That said, Susan may need to hire an attorney to secure policy limits settlements from both carriers in that situation.

A third option for Susan is to negotiate her bills with her medical providers. Medical providers are used to being paid less than 50% of their billed service due to their contracts with insurance carriers. If a person is uninsured, the providers would rather get paid something than nothing. An attorney can negotiate the bills with the providers by offering to reduce their own fee as well. Often, this results in medical bills being paid in full with no remaining balances, attorneys being paid in full with no outstanding bills, and injured persons like Susan, getting some money back in their pocket to compensate them for their lost wages and pain and suffering.

The best part of my job is being able to help people in these situations. A phone call to our office will never result in a bill. If you have questions about how we can possibly help in your situation - no matter how bleak it looks - please call for a consultation as soon as possible.