Insurance Coverage

INSURANCE COVERAGE ISSUES IN PERSONAL INJURY CASES

A serious car accident or other personal injury often leaves the injured person with medical bills and other costs that far exceed his/her ability to pay. Accordingly, most people must look to various insurance policies to cover these costs and hopefully put the injured person in the same position he/she was prior to the accident. Below is a list of types of insurance coverage that may impact a serious personal injury case.

Liability Coverage

When a police officer asks to see proof of a driver’s insurance he/she is verifying that the driver has what is known as "liability coverage." Drivers in Missouri are required to carry a minimum of $25,000.00 per person and $50,000 per accident of liability coverage on their automobile. This type of insurance compensates injured people for damages arising from an accident that is the responsibility of the insured.

Uninsured Motorist Coverage

Uninsured Motorist Coverage comes into play when the person responsible for the accident has no insurance. Missouri law requires this coverage to be purchased by all drivers with limits of at least $25,000.00 per person and $50,000.00 per incident. The insurance policy is owned and paid for by the person who is injured. There are times when your insurance company may be hesitant to pay on an uninsured motor’s policy and are at times even more hesitant to pay the full value of the claim. An attorney can help you navigate the claims process and file a breach of contract action if necessary to secure payment.

Underinsured Motorist Coverage

Underinsured Motorist Coverage is similar to Uninsured Motorist Coverage. It applies when there is insurance coverage for an accident, but the policy limits are not sufficient to cover the damages. Like Uninsured Coverage this policy is owned and paid for by the injured person. It is, however, not required by state law. Accordingly, there is no pre-set minimum. A close inspection of the injured person’s own automobile insurance policy is necessary to determine whether underinsured coverage is available and what the applicable policy limits are on that coverage.

MedPay Coverage

Another type of insurance owned and paid for by the injured person is Medical Payments Coverage or MedPay. This is an automobile insurance policy that pays for medical bills arising from an automobile accident, up to the policy limits, regardless of who is responsible for the accident. This coverage is also not required by state law so there is no pre-set minimum. The policy limits on a MedPay policy are usually small (often $5,000), but it is a policy that should not be overlooked.

Health Insurance

Health Insurance is what most people think of when they hear the term "insurance." This coverage is held to cover medical bills and other healthcare costs incurred by the insured regardless of the cause. There are, though, often complications if the medical bills are caused by an identifiable source who can pay. Health insurance policies usually have very high policy limits; though, in catastrophic cases they can be exhausted.

Question:  Does the injured party have to repay the health insurance company if funds are recovered from another source?

Answer: Sometimes. The general rule in Missouri is that funds recovered for damages resulting from personal injury are not assignable. For this reason, health insurance benefits paid as a result of an accident do not have to be repaid to the health insurance company. Part of the rationale for this rule is that the injured person has paid premiums to have the health insurance in effect and should be given the benefit of the premiums paid.

If however, the health insurance is provided by what is known as an ERISA-funded employer plan, then the health insurance may be able to recoup some or all of its payments made related to an accident. This is because ERISA is a federal law related to employee benefits. This federal law trumps the Missouri state law that does not allow the health insurance company to recoup payments paid to an insured. When determining whether, or to what extent, health insurance payments must be repaid, a very careful review of the terms of the health insurance policy is required by an attorney familiar with these issues.

Disability Insurance

If an injured person is unable to work as a result of an injury, disability insurance can pay a certain portion of the lost monthly wages. These policies are sold in both short-term and long-term varieties. This policy is a separate type of insurance that is paid for by the injured person. Benefits are paid in monthly installments rather than a lump sum and the disability insurance companies usually require detailed periodic reports to continue to make the payments. Therefore, it is important that the attorney stay in constant contact with both the injured person and the insurance company during the claim. Regrettably, it is sometimes necessary for the attorney to file a contract action to force the insurance carrier to pay.

Umbrella Insurance Policies

A relatively uncommon, but important, insurance type is an Excess Liability Policy or "Umbrella Policy." If the responsible party’s liability policy is not sufficient to cover the damages arising from an accident, an Umbrella Policy can cover the remaining difference. These policies are not considered "automobile" insurance policies. Rather, they provide coverage for most liabilities of the insured, including automobile accidents. Often you see the policy as part of homeowner's insurance or insurance related to a privately owned business. These policies are secondary coverage designed to only pay if no other insurance is available, but to provide protection to the assets of the insured. Careful investigation of all the responsible parties’ insurance policies is necessary to identify whether umbrella insurance coverage is applicable.

Question:  What is credit insurance?

Answer: Credit insurance is a form of disability insurance that pays all or a part of a person’s debt payments during a term of disability.

In today’s world of consumer credit, almost every lending institution offers some type of credit insurance. As a general rule, with very specific exceptions, this coverage is rarely advantageous to the consumer. If an injured person has paid for this coverage, though, he/she should get the benefit of those premiums. It is necessary, however, to make and support the claim in a timely manner as these policies are usually a form of short-term disability insurance which may have complicated bureaucratic procedures which can make it difficult to qualify for benefits. An attorney can help the injured person collect the full benefit of their bargain in these types of policies.

Similarly, "gap coverage" is a form of credit insurance that pays when an automobile is rendered a "total loss," but the automobile owner owes more money on the car than the car is worth. In that instance, gap coverage will pay the difference so that the owner is not left with an outstanding bill on his car after it has been totaled.

Medicare/Medicaid & Other Governmental Benefits

Though not technically "insurance", for those who qualify, there are governmental programs that will pay for medical costs, even if those costs are associated with an accident. The most common of these programs are the Medicaid and Medicare programs. Eligibility for these government benefits is determined by the income level, age, and disabilities of the person injured. Attorneys must be mindful of various issues when Medicare/Medicaid benefits are received by a client. These governmental programs have a near absolute right to be reimbursed for the benefits they provide to an injured person. Counsel must be careful not to allow Medicare/Medicaid reimbursement to "eat up" all of the funds available to his client. Most importantly, there are complex procedures for notification of the government agencies that administer these programs and for negotiating a settlement of the client’s obligations to those agencies. Failure to properly, and promptly, deal with these issues early in the case can cause extreme delay and may significantly decrease the final net result to the injured party.

There are many ways insurance can effect the financial outcome of an injury. The attorneys at Lear & Werts L.L.P. can work with you to navigate this system and protect your rights. Contact them today for a free initial consultation if you have suffered a back injury, neck injury, brain injury or other serious harm from an accident.