“I don’t want my insurance to pay for my injuries!”
Posted by: Colt Dodrill
November 13, 2008
Topic: Insurance
I hear this all the time from my personal injury clients. I usually respond with, “you have been paying a lot of money for that insurance, you might was well use it.” Indeed, Nevada has some of the highest automobile insurance premiums in the country and health insurance premiums have been drastically increasing over years. Moreover, health care and insurance were a major issue in this past presidential election. So, I am surprised when, after sending a substantial portion of their income to insurance companies for coverage, my clients still want to prevent those same insurance companies from mailing them a check in return. A portion of those feelings are derived from a natural sense of justice. However, most of the confusion stems from a misunderstanding on how insurance works. I never disagree when someone states how murky the waters of insurance are.
As for justice, there often isn’t any as far as the injured party is concerned. Tort law provides monetary recovery, not for revenge. Except for rare exceptions, the civil laws of this country only govern the transfer of money from one person (perhaps the defendant) to another (perhaps the plaintiff). In other words, an injured plaintiff may receive, if anything, only a judgment for a specific sum of money. A personal injury lawyer cannot get the defendant fired, force him to move out of state, force him to buy a slower or safer vehicle, or install better lighting in his parking lot. That is the realm of the criminal justice system and the executive branch of government. So, if all you can receive is money for your injuries, why be concerned about which insurance (or whose) that money comes from?
First, N.R.S. 687B.385 prohibits an insurance company from raising the premiums of an insurer for making a claim when the accident, was not his fault. Nevertheless, many people remain concerned that their automobile insurance premiums will increase if they make a claim, because insurance companies do not generally make that known to their insurance companies. Carriers benefit from this myth in that many people fail to make legitimate claims as a result.
Second, clients are often confused as to what types of insurance may be available to them. Insurance comes in two major flavors: first-party and third-party. First-party is the client’s own insurance. It mainly consists of his automobile insurance and his health insurance, although depending on whether he was working at the time, may consist of his employer’s automobile insurance, and in some cases, worker’s compensation coverage. Going deeper, the client’s first-party automobile insurance may consist of medical payments coverage and underinsured/uninsured motorists coverage (“UIM”). Those coverages may make monetary payments to the client’s medical provider, or in some cases, directly to the client. Further, medical payments coverage in Nevada typically cannot subrogate. In other words, unlike health insurance, the client generally does not have to repay them from a settlement. So, as expensive as automobile insurance is in Nevada, not using medical payments coverage when available is like paying for gourmet food and going hungry while you let it spoil. Any client unaware of his coverage should review the declarations page or consult with his insurance agent.
UIM coverage makes payments directly to the client when the at fault party does not have enough third-party coverage to fully compensate the plaintiff. Like most insurance, UIM coverage is expensive. However, with so many people driving in Nevada with either no insurance or the minimum ($15,000) per person liability limits, driving without UIM is a risky proposition.
Health insurance includes, not only private health insurance like one may receive as a benefit from his employer, but also, public health insurance like Medicaid and Medicare. Typically, health insurance has a subrogation clause that allows them to seek reimbursement from any recovery you receive. However, in using health insurance, the plaintiff is able to take advantage of negotiated rates for health care. For example, a Dr. that may otherwise charge $80,000 for a particular procedure, may only be able to charge $3,500 for the same procedure if billed through health insurance. That allows the plaintiff to take home, in that case, $76,500 more than if he treated on a lien. I usually recommend my clients call their insurance to make sure they use a preferred provider in order to obtain those savings. After all, larger medical bills does not always mean a larger verdict or settlement. I strive for my clients to keep as much of their settlements as they can. Overpaying for anything never makes sense. Medical care should be treated the same way.
Unlike first-party coverage, third-party insurance is the liability insurance of the at-fault party. This may be automobile insurance, commercial general liability insurance, homeowner’s insurance, or renter’s insurance depending on the facts of the case. There may also be an umbrella policy. A good lawyer knows where to go for coverage. Indeed, depending on the circumstances, there may be more than one available. However, limiting one’s recovery to third-party coverage is not wise.
The truth is insurance is its own world with its own language and laws. Because of these complexities, among other things, many people hire attorneys to make their personal injury claims. But as complex as insurance is, one thing is clear: If you are concerned about how much you pay for insurance, you should not balk if your insurance actually wants to pay you. Otherwise, why are you paying for insurance you do not want to use? Of course, that is just my opinion, you should consult your attorney with any questions.
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