Following a Car Accident Settlement – How are You Reimbursed

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Photo Credit: Bill Bradford

After you have your first $3,000 of medical expenses paid by the PIP fund of your own insurance, you will contact your health insurance provider to begin paying for the rest. When you have valid health insurance, this should not be a problem. It is the best route to go because it could take a very long time to get the at-fault driver’s insurance company to pony up and pay you for your damages. This health insurance will allow you to continue to seek medical care while you wait, however, most health insurance policies contain subrogation provisions that require you to pay them back for everything that they pay for injuries directly related to an automobile accident. We’ll explain these things briefly here but having an experienced legal attorney on your side for these things is essential.


That means, that when your settlement or judgment finally comes in against the at-fault party, you will be required to pay a portion of it back to the health insurance company. There is always a chance that your provider does not have a subrogation clause in your policy, and there is even a chance that they do have a clause in the contact, but that it is invalid for some reason. Those things are not very likely though. Typically, your attorney will be required to sign a lien stating that the health insurance company will be paid back before you receive your remaining funds out of a settlement. The lien can sometimes be limited by federal law called ERISA privileges, but your settlement will usually be an amount, less the amount that your health insurance has paid on your behalf. Aggressive health insurance companies will even contact the liability carrier directly to insure that they are paid back before the injured party receives any funds.

If you have an experienced personal injury attorney, he or she may be able to negotiate with your health insurance company to accept a lower amount. That ability to have an experienced negotiator on your side can put thousands of extra dollars in your pocket. It is important to at least consult with an attorney about your health insurance subrogation before paying the amount that they ask for.

Health insurance is a great thing to have, it can make the process after an accident much less stressful. However, you don’t know what you don’t know. Don’t sell yourself short by giving up the majority of your bodily injury settlement to your health insurance company without speaking with a car accident attorney who knows and understands the law.


This article is offered only for general information and educational purposes.  It is not offered as and does not constitute legal advice or legal opinion.  You should not act or rely on any information contained in this article without first seeking the advice of an attorney.