How Insurance Works in a Personal Injury Case

Something that many people do not understand is that insurance plays a huge factor in how much money, if any, they receive for their injuries. The sad reality is that many people simply do not carry any insurance or do not carry enough insurance to cover you for your injuries. The insurance company only has to pay you the limits of what their customer has purchased.

The amount of money a driver has to have in insurance varies from state to state. It also changes over time. In Washington State, the minimum amount of insurance a driver has to have is $25,000. In Texas, the law is that a driver must have at least $30,000 in insurance coverage to pay for injuries to a person they cause in a car accident and $25,000 in property damage they cause to a car they hit if they are in an accident.

For example, if John Smith only purchased a $30,000 insurance policy so he can only pay $1,000 per year for this coverage, then if you are in an accident with John that John causes from rear-ending you, the most amount money that his insurance company will have to pay is $30,000. It is possible that you may have $50,000 in medical bills, but it does not change the fact that John’s insurance company is only legally obligated to pay $30,000. This may seem unfair since insurance companies obviously have much more than $30,000, but it doesn’t change the law.

UNINSURED MOTORIST COVERAGE (UIM)

Uninsured Motorist Coverage, known as UIM, is almost always going to be the best way to receive money in the event that the driver who hit you does not have enough insurance to cover all of your damages. This is insurance coverage you have to purchase on your own. You can purchase as much insurance as you want. In the event that you are struck by someone who either has no insurance or only the bare minimum amount of insurance and your medical bills far exceed the insurance the driver has who hit you, then your only option is to make a claim against your own insurance company.

This is how a case will likely go if you are hit by someone who either has no insurance or very little insurance. If they have no insurance, then you will immediately file a claim against your own insurance company. While it may seem wrong or unfair, your insurance company will not just hand over money. You will have to fight for your case just like you would if you were filing a claim against another insurance company.

PERSONAL INJURY PROTECTION (PIP)

PIP is a form of car insurance you buy when you get car insurance. PIP is a form of medical insurance, so if you’re in a car accident and have medical bills, PIP will pay up to a certain amount of your bills for you. Think of it as the first layer of insurance that will pay your bills. If your medical is more than, for example, $50,000, then there is a good chance your PIP will pay the first $10,000 or $30,000—depending on how much insurance you bought—and then your medical insurance will pick up the rest of the bill.

SUBROGATION

Subrogation is a legal word that basically means repayment. It can have a very important role in your case because it will likely reduce how much money you receive. When it comes to repayment, or subrogation, your car or health insurance company often gets to receive money from your lawsuit. Be aware that if Medicaid or Medicare or any state or government entity pays your medical bills, then they have to be notified of your settlement and they will often not take a reduction in what has to be repaid. The same goes for what is called a self-insured plan, which many large companies have, such as Boeing. Again, every case is different, but talking to a lawyer to understand how much you have to repay out of your settlement is very important.