Insurance companies make money when you pay your premiums regularly and never make a claim. This ideal became harder for auto insurance companies to achieve in the 1970s when some states passed no-fault insurance laws. These laws force accident victims to submit medical claims to their own companies – not that of the other driver, even if he caused the accident.
Your doctor and the hospital you go to don't care how you got hurt. They care about making you better, which they do for a fee. They'll bill you for their services, and you are responsible for paying them – or for making sure an insurance company does it for you. Even if your state allows you to file a lawsuit against the other driver and his insurer for payment of your medical bills – and no-fault states generally do not – you may have to come out of pocket to pay your medical care providers long before a settlement is reached. It's then up to you to try to recover these costs when and if you can negotiate a settlement.
If you live in one of the 12 no-fault insurance states, your auto insurer probably structured your policy to cover any potential medical bills brought about by an accident. Your policy likely includes personal injury protection or medical payments coverage to address your medical bills because you can't sue the other driver. This allows you to submit your bills to your own company, and your company will usually pay the bills directly on your behalf. You can only sue the other driver if your accident was extremely bad and caused you serious injury -- and your medical bills reach a certain dollar threshold.
If your medical bills are "reasonable and necessary," your company will pay them up to the amount of protection you've bought and after any deductible you've agreed to. If you seek care from a top-notch provider, your personal injury protection coverage -- PIP coverage for short -- may only pay that portion of his bill equal to what the average provider would charge. If you bought $15,000 in PIP coverage, any medical bills over this amount are your problem, even if your bills total $50,000.
If you live in an at-fault state, the situation reverses, and this is where possible settlement negotiations can come into play. The other driver's insurance should pay for your medical bills, but it will only do so if it's forced to. This means you must file a lawsuit and prove that the other driver was at fault. The other driver's insurance company won't pay your bills until the lawsuit resolves, either through settlement or trial. The cost of your medical treatment is typically included in the amount of money you settle for. You'll either receive reimbursement for payments you already made, or you can pay the providers from your settlement, assuming they are willing to wait for payment.
If you have health insurance, you can submit your medical bills to this provider instead. You might still have a co-pay or deductible, but there's generally no cap on the amount of bills they'll pay. If you later recover money in a settlement, however, the insurer usually has a right to reimbursement.
Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.