When Medical Bills Exceed Settlement After an Auto Accident, California
In the unfortunate event that you’re in an auto-accident in California, the settlement claim might be the only compensation you’ll get.
In that event, you might find yourself in a tug of war with the defendant or the insurance company responsible for getting you the money you deserve. You’ll want your settlement to cover the economic costs of the injuries (medical bills, lost wages, etc.), as well as the noneconomic damages (pain and suffering), you have sustained. The other party is likely going to attempt to shift some blame for the accident back onto you in order to minimize the amount they’ll have to pay.
Though it may not seem fair, there is a chance that the medical bills you have incurred in the wake of the auto accident might end up exceeding the total settlement you receive – and in this article, we’ll be touching upon how that happens, how to avoid it, and what to do if you ever find yourself in such a sticky situation in the first place.
When Are Medical Bills Higher than the Settlement?
When you’ve been injured in an auto-accident in California, you have three options:
- You may opt for a personal insurance claim, or a first-party claim or
- You may opt for a third-party claim with the insurance company or the party at fault
- Or both.
Whether you go ahead with a personal insurance claim or a third-party claim, the medical bills are not going to change, nor will the pain and suffering you are entitled to compensation for.
Economic vs. Noneconomic Damages in California
In an auto accident in California, you might suffer from a series of both physical and monetary injuries - like broken bones, emotional distress, loss of income from being unable to go to work, damage to your car, and more.
All of these damages are measured on a case-to-case basis. Determining the economic loss, or special damages, is usually a relatively straightforward process (by adding up all your medical bills plus any lost wages). Calculating 'pain and suffering,' or general damages, is not nearly as straight. However, determining pain and suffering is a very important step in your settlement.
As a plaintiff, you’ll want to value ‘pain and suffering’ higher. On the flip side, a defendant or as an insurance company will want to minimize the value. The ‘pain and suffering’ is a calculation of the damages that you are to receive aside from the quantifiable economic damages (like medical bills and lost income). Insurance companies measure pain and suffering by considering:
- The gravity of the injuries,
- The chances and speed of recovery,
- The liability of both the plaintiff and defendants,
- How the injuries are impacting the daily life of the plaintiff,
- Damage to property and the impact of the collision,
- The emotional distress caused by the accident,
- Loss of past and future income, and
- Loss of earning capacity.
To solidify these claims, both the parties rely on expert reports – doctors, forensic scientists, psychiatrists, and more. However, every case is different and having a legal expert on the table while determining ‘pain and suffering’ can help you immensely as you seek to get the compensation you deserve.
When Medical Bills Exceeds the Settlement Amount
If the insurance company or the defendant can prove that the ‘pain and suffering’ incurred by the plaintiff is low, the plaintiff might end up getting the shorter end of the stick during settlement negotiations– and therefore, their medical bills could exceed their settlement claims.
But how does a defendant or an insurance company determine a low valued claim of ‘pain and suffering’? Well, they essentially prove the following things:
- That the plaintiff’s injuries aren’t serious enough to warrant a high amount
- That the plaintiff has a very high and speedy chance of recovery
- That the plaintiff is partially or wholly responsible for the injuries
- That no significant impairment in the daily life of the plaintiff has been caused
- Or some combination of all of these above.
If the defendant is able to prove any or all of the aforementioned, they might be able to lower the valuation of the claim to an amount that might not cover your medical bills.
Policy Limits and Your Medical Expenses
Personal injury claims are paid by either your insurance company or the defendant’s insurance company – and depending on which of the two insurance companies it is, the policy of the settlement might differ.
If you’re suing your own insurance company, there’s a high chance that you’re going to get a more extensive settlement – and that’s because they’ve already signed a contract to protect you in case you’re ever injured. However, if you’re suing another person or their insurance company for settlement against the injuries caused to you, you’ll only be recovering your compensation from the defendant’s insurance policy – whose primary purpose is to provide insurance the defendant and which may be more limited to third parties.
California Auto Accident Settlement Process
Court mechanisms might have been set up to provide justice and equity – but they come with their own set of flaws. For one, there’s a lot of tedious paperwork – and then there’s the unprecedented delays and a very unpredictable jury.
This is where pre-judicial settlement claims come in. Settlements let the parties negotiate outside of the court – in the absence of a jury and without a lot of paperwork. This way, the parties have more control over the time and results of their claims.
In California, you have about two years to engage in settlement negotiations before you file for a judicial case. If there’s property damage, the time limitation for settlement negotiations on those damages is to three years.
In California, a driver only is required to carry state minimum insurance coverage - which has a policy limit of $15,000.00 for a one-person accident and $30,000.00 for an accident involving multiple injuries. Low-income drivers may qualify for even lower policy limits.
What happens if I have incurred medical bills that exceed the policy limits of the party who caused the accident?
This is where it gets tricky. Fortunately, there are several potential options for an experienced personal injury attorney to take that may serve to get those bills reduced and get you the compensation you deserve. You might need an expert on your team to determine the best way to get you compensation for the ‘pain and suffering,' as well as the economic damages, or to simply to figure out the loopholes in the policies of the insurance companies you’re suing for damages.
It’s crucial to have a personal injury attorney who’s an expert in car accident claims, negotiating with insurance companies, determining ‘pain and suffering’, and landing you the settlement that you deserve. A personal injury attorney has decades of hands-on negotiation experience and can get you a good settlement claim against an adamant insurance company or defendant.