Can my health insurance cover damages if car insurance does not pay enough?

Health insurance can sometimes help cover damages if car insurance doesn’t pay enough to cover all medical costs. But it’s important to look at all options that may be available.

How Health Insurance May Factor into Car Accident Costs

Because Colorado is an at-fault state, it’s the responsibility of the person who caused the accident to pay for damages. This is typically done through his/her auto insurance policy. But there are circumstances in which that coverage may not be enough.

For instance, let’s say the driver of a passenger car is going straight through an intersection on Federal Boulevard in Denver. The driver of an SUV turns left at the light, directly into the path of the oncoming car. As a result, the driver of the passenger car suffers head trauma, internal bleeding and multiple fractures. Damages total $35,000.

But the SUV driver only carries the minimum amount of liability insurance required in Colorado, which is $25,000 for bodily injury. The driver of the car is concerned about the other $10,000 and how those damages will be covered.

Generally the health insurance company will cover accident-related costs. But there may be a deductible that the policyholder must first meet. And even after that, there could be a copay which means the health insurer would cover only a certain percentage of the remaining costs after the deductible and the injured person would pay the remaining percentage of costs.

Sometimes they will work with the other driver’s insurance company to figure out who is going to pay. But it’s usually the auto insurance policy that pays for most (if not all the bills). Once that has been exhausted, then the health coverage may kick in.

Other Options That Could Help Pay for Accident-Related Expenses

There may be other options to consider. For instance, underinsured motorist coverage is not mandatory in the state of Colorado. But if a driver opted to purchase this insurance, it could help pay for the difference. Of course, that depends on policy limits.

Using the aforementioned example, if the driver of the passenger car had $25,000 in underinsured motorist coverage, the $10,000 not covered by the SUV driver’s insurance policy would be paid for under this plan. Further, if the victim holds medical payments coverage, it will cover medical costs regardless of fault and may even pay for copays or deductibles.

Pre-settlement funding (a loan prior to setting your case) may be helpful in some cases if expenses keep mounting. Another option is to file a lawsuit against the at-fault driver.

In the event the accident victim recovers compensation for medical bills paid for by health insurance, the health insurer may place a lien on the settlement to recover its costs. Be sure to discuss this possibility with your lawyer as you begin the lawsuit or claims process.

Importance of Seeking Legal Counsel after a Car Accident

If there are concerns about ensuring compensation is adequately addressed in a claim, contact an attorney. With different insurance policies that may affect coverage and the necessity of proving fault, it’s best to have legal representation if there are significant injuries and the injured person has suffered financial, physical and/or psychological losses.

If you’re in the Denver area and require assistance, contact attorney D.J. Banovitz to set up a consultation by calling 303-300-5060 or visit our contact page.