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Am I Required to Pay Back My Health Insurer After Receiving an Injury Settlement?

Posted on behalf of Arnold Law Firm in
insurance-policy-paper-man-black-suit-no-headsInjury victims often use their health insurance to cover medical treatment while their attorney pursues an injury claim against the at-fault party. However, you may not realize that, when you signed up for health insurance, you probably signed a document that included an agreement to reimburse the insurance company if you are awarded an injury settlement. This process is called subrogation, or a substitution of one party by another in respect to a debt or insurance claim, accompanied by the transfer or associated rights and duties. Fortunately, your attorney can negotiate this process in an attempt to preserve fair compensation before the insurance company takes its cut. The experienced Sacramento personal injury lawyers at Arnold Law Firm have detailed knowledge of the subrogation process. We are here to answer your legal questions in a free consultation.

Insurance Subrogation in California

Under California law, insurance companies have the right to receive reimbursement from the at-fault party for expenses they paid on behalf of the policyholder. If you used your own health insurance to help pay for the medical expenses you incurred and you then receive compensation from the at-fault party’s insurance company, you may be required to use a portion of your compensation to pay your health insurance company back. Fortunately, California law also says injury victims must receive compensation for their losses before insurance companies can claim a portion of the settlement to cover their expenses. This means your lawyer can negotiate with the health insurance company to ensure you are fairly compensated before the insurance company takes its cut.

California Civil Code 3040 and How Much You Have to Repay

California Civil Code 3040 limits the amount that a private health insurance company can receive in reimbursement from an accident victim’s settlement. Generally, the amount the insurance company can receive is the lesser of the cost of the medical services you received or a percentage of the total settlement. The cost of medical services is determined by how the insurance company pays medical providers. Sometimes the insurance company has an agreement with a doctor to pay him or her the same fee, regardless of the services he or she provides. In these situations, the insurance company is limited to 80 percent of the usual price that medical providers charge when they bill doctors based on the specific services provided. Medicare, employer-sponsored health plans and Medi-Cal have separate rules that may impact how much reimbursement insurers are entitled. This is a complex issue, so it is important that you consult with a knowledgeable lawyer who can explain if there are other factors that must be taken into consideration.

What Are Compensatory Damages?

Compensatory damages in California consist of either economic or non-economic damages. Economic damages are those that are more easily quantified and tied to an economic loss that you suffered. Examples of economic damages include:
  • Medical expenses
  • Property damage
  • Lost wages
  • Lost earning capacity
Non-economic damages are not easily quantified and not tied to a direct loss. However, California law recognizes your right to recover these damages. Examples of non-economic damages include:
  • Pain and suffering
  • Mental anguish
  • Emotional distress
  • Physical impairment
  • Disfigurement
  • Inconvenience
  • Loss of enjoyment of life

Contact Arnold Law Firm for Help with Your Claim

If you were injured in an accident, the experienced lawyers at Arnold Law Firm may be able to assist you. We have many years of combined experience negotiating with insurance companies and have a proven record of recovering fair compensation for injury victims. Our lawyers work on a contingency fee basis, so we charge nothing upfront and we only get paid if we successfully help you recover compensation for your claim.

Call Arnold Law Firm today at (916) 777-7777 for a free consultation.

Settlement - $3,767,000

Truck Accident

A 20-year-old man who had been married for just 12 days left home on his way to work. He was driving on Pleasant Grove Road in Sutter County in the early morning when he came upon a slow-moving truck. As he pulled out to pass the truck, the truck driver turned left in front of him. The young man attempted to steer back into his lane but his vehicle struck an un-flagged piece of metal extending from the back of the truck. He died in the resulting crash.

Expert witnesses brought in by the Arnold Law Firm proved that the truck, owned and operated by a hauling firm, should never have been on the highway that morning. Specifically, the rear and side turn signals did not work and the rear-view mirror was in a poor state of adjustment at the time of the collision. As a result, the driver, who had failed to properly inspect the vehicle before setting out that morning, couldn’t see the young man’s vehicle as it attempted to pass.

The poor condition of the truck, its lack of maintenance and the manner in which it was operated were found to be substantial factors in causing the collision that killed the young man. The testimony also established that the man had been making a lawful pass at the lawful speed limit and acted reasonably when he attempted to avoid the collision.

The man’s 20-year-old widow was awarded $3,767,000.77, his parents were awarded $185,131 and the family was reimbursed $11,899 in funeral expenses. Though money is a poor substitute for a young man’s life, this verdict demonstrates that drivers who endanger the lives of others will be held accountable for their actions.