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How Does Health Insurance Affect Your Accident Case?

How Does Health Insurance Affect Your Accident Case?

A question I’m asked every now and then as a Los Angeles car accident lawyer is how health insurance affects one’s case.  I’ll clarify.

If someone is injured in an auto accident and needs medical treatment, the financial costs associated with the treatment are important factors in the case.  These costs are known as special damages, and if you have an attorney representing you, he or she will try to obtain reimbursement for these (and other) costs.

If you have health insurance, can you still recover the costs of your treatment even if your health insurer paid them?

In California, the answer is yes!  That’s because of an old doctrine called the Collateral Source Rule.

The Rule has been around in some form or another in California since 1856 (Martin White v. Mary Ann, 6 Cal. 462, 470-71).  A more recent decision explains that “a wrongdoer is responsible for injury irrespective of whether anyone else provided protection or indemnity to the victim (Smock v. State of California, 2006).

In plain English, this means that if you’re injured in an accident and use your health insurance to pay for your treatment, the person who injured you cannot argue that his or her responsibilities to compensate you for your injuries should be lessened or reduced because your insurance paid for your treatment.

In fact, during trial, evidence of health insurance would be inadmissible.  A jury could review your medical bills, but a defendant cannot mention that these bills were paid by health insurance.

The Collateral Source Rule serves an important purpose by encouraging people to buy health insurance.

On a related note, many health insurance plans have a reimbursement, or “subrogation” clause.  This means that if you use your health insurance to pay for treatment caused by another person’s negligence, you might be contractually obligated to reimburse your health insurance company for costs it paid on your behalf.  Many times, these costs are negotiable.  Discuss the particular facts of your case with your attorney.

If you have questions about how insurance works as applied to your accident case, please give the Rabbi Lawyer a call today.  The initial consultation is always free.