After hearing that actress Elle Clark (of The Seventh Equinox book trailer fame) almost bought the farm in a car accident yesterday, I flashed back to the two and half years I spent as a personal injury (PI) paralegal for a small Virginia law firm. And I realized I’m full of it.
Full of advice, I mean. So, I thought I’d pass it on, for what it’s worth. Bear in mind a couple things before reading on. First, I’m not a lawyer, and this shouldn’t be taken in place of qualified, licensed legal advice. Get a lawyer, dammit. Second, my PI knowledge is based on Virginia law, and it’s nearly six years out of date. So hold a grain of salt in one hand and a slice of lime in the other. Folks with better information — particularly those currently in the field — are encouraged to post comments below to correct and/or update my info.
That being said, there are some general concepts at work in any auto accident insurance-coverage situation I believe I can orient you to.
You’ve been injured, so get yourself treated. Go to the hospital. Go to all your doctor’s appointments. Have your providers submit your medical bills to your heath insurance carrier, just as always. Your carrier will discount and then pay your bills (minus your deductible). Just get your bills paid, and take care of yourself. Believe me, you don’t want to piss off your medical providers. They will sue to you to recover. They don’t care that somebody else may be at fault in your car accident.
If you don’t have health insurance, check your auto policy for medical expense coverage (see below). You can also stave off the hell hounds of health by negotiating for a reduced bill, paying just a little bit at a time, or having your attorney send them a “lien letter” that promises they’ll be paid out of any liability settlement you receive in the future. Lien letters don’t always work, but sometimes they can keep the debtors off your butt for a little while.
Comprehensive/Collision Coverage (auto insurance)
While health insurance will take care of your medical needs, this type of auto coverage will take care of your transportation needs. Your good ole insurance carrier will pay to repair or replace your vehicle. Here in Virginia, comprehensive/coverage is optional, so if you don’t have it and you’ve been in an accident, it sucks to be you. You’re gonna be waiting for that property liability settlement from the other guy’s auto carrier, which may or may not happen. So, absolutely, get this type of coverage from your own auto carrier ahead of time.
I drew a lame little line here to underscore that the above two areas — your health and your transportation needs — are your priorities. If you stopped here and didn’t do anything else, then your basic needs would be met. Everything that follows is merely designed to get you more money.
Medical Expense Coverage (auto)
Formerly known as MedPay (a catchier term that I’ll go ahead and use in this section), this is an optional line of no-fault medical insurance you carry on your auto policy. “No fault” means that it doesn’t matter if you or somebody else caused the accident. MedPay will cover the medical bills of anyone inside your vehicle injured in the accident. Anyone means you, your family members, your friends — anyone in the car.
If you don’t have normal health insurance, you can name your auto carrier as your health insurer so that your doctors will claim against your MedPay coverage. This won’t get you any of the network discounts that make ordinary health coverage so cool — at least, I don’t remember seeing any — so the auto carrier will merely pay the bills in full and exhaust your available coverage that much sooner. You might have several thousand dollars of MedPay available, but once it’s gone, it’s gone.
The smarter way to use MedPay assumes you already have health insurance. Use your regular health insurance to get your bills paid and your doctors off your back (see above). Then, what you do is obtain new copies of all your medical records and medical bills related to your auto injuries, and then you submit those to your auto carrier. It won’t matter if your health carrier discounted your $1,000 bill for a CT scan down to $200 and then paid that. Other carrier’s discounts and/or payments are immaterial. Your auto carrier will be required to cut you, personally, a check for the full amount.
If you’ve already retained a lawyer to handle your PI claim, then he’ll soon be in possession of all your medical records and bills, so he should handle your MedPay claims for you. He might charge you an hourly fee for this service — and 20 cents a page for photocopies, of course — but all that should be paid out of your liability settlement, if any (see below).
Liability Coverage (auto)
This is where all the drama comes in, all the Perry Mason court room theatrics, late-night infomercials, and ambulance-chasing. And it’s also where most of the misunderstandings exist.
Liability coverage is a type of legally required auto insurance designed to pay for one’s negligent acts. If you caused an accident, then your auto carrier will pay the aggrieved party out of this coverage. It comes in two varieties: property coverage and medical coverage.
Property liablity coverage will pay for fixing or replacing the other guy’s vehicle if you’re at fault. It would also come into play if, for example, you drove your car through someone’s house and wiped it out.
Medical liability coverage will compensate an aggrieved party for his medical bills. Keep that in mind: it will compensate him. It won’t pay for the medical bills, at least not directly. It’s not medical insurance. It’s to compensate a person for his damages, after the fact.
The way it works is that, let’s say you’ve been injured in a car accident, and someone else is at fault. Once your medical condition has stabilized — either you’ve completely healed, or your new medical disability has reached a predictable base line — then you can and should make a liability claim. “There’s only one bite at the apple,” PI attorneys like to say, which means you can only make a liability claim one time, so you better make it a good one.
Your medical bills, your loss of income, your mental anguish, your loss of consortium — all of these things are your medical damages. And your damages are what liability coverage is designed to compensate you for. This is ultimately a subjective determination, so PI attorneys and insurance adjusters have various ways to calculate and negotiate the value of your claim.1
The time limit to submit a liability claim will be subject to the statute of limitations of your state. In Virginia, it was (and is?) two years from the date of the car accident.2 If you’re a minor, then the two-year clock doesn’t start ticking until you reach the majority age of 18 — which means that you might not have to file a liability claim for the injuries you suffered at age 4 until 20 years old.
In any case, every liability claim stands on what’s called the three-legged stool. A three-legged stool missing one of its legs will fall over, so likewise must a liability claim have its three legs in order:
Early on during your recovery, you might receive a phone call from the other guy’s auto carrier. It might be an insurance adjuster. Remember that his motivation is to limit the amount of money he’ll have to pay to you. He doesn’t care about you. So he might have a tape recorder running while he talks to you. He’ll ask you about your injuries and try to get you to say you had an achy neck and back before the accident because your chiropractor was rough with you last week. He’ll ask you about the accident and try to get you to say you were maybe a little bit responsible for what happened. That last part is particularly important. Virginia is a “contributory negligence” state, which means that if you’re even one percent responsible for what happened to you, then you can kiss your liability payout goodbye.
The way to handle an insurance adjuster’s phone call is to keep your mouth shut. Hang up on him, if you have to. Or, if you have the steel, politely ask him to mail a “letter of representation” either to you or your attorney. This letter should identify who he is and whom he is insuring, which will make identifying the relevant insurance carriers a hell of a lot easier (see #3 above).
And that’s about all I can think of. I hope this general advice helps someone. (I’m looking at you, Elle!) Feel free to ask questions or to tell me where my information is wrong.
1When I worked in the field, it was “three times treatment and one-and-a-half times diagnostic, plus lost wages,” meaning that I totaled your medical treatment bills x 3, your medical diagnostic bills x 1.5, and your lost wages x 1, and arrived at the likely settlement value of your liability claim. Of course, we didn’t ask for that amount from the liability carrier right off the bat; we demanded an amount two or three times that — high balling because we knew their counteroffer would low ball, and then we’d go back and forth, negotiating and compromising, until we hopefully arrived in the middle, right at the original valuation. Back
2If you haven’t completely recovered from your injuries within two years, then we’d file a lawsuit in circuit court to “toll the statute.” Because you have up to one year to serve the lawsuit on the other side and thus initiate formal litigation, we wouldn’t serve it right away. And then, if you weren’t healed after three whole years, we might just “non-suit” the lawsuit, because then we’d have (I think it was) six months to re-file it and start over. What fun we had in litigation. Back
3The big ones in my area are Marks & Harrison and Chandler Law Group. Back