A severe car crash involves more than recovering from the injuries and securing a settlement or judgment from the guilty party. Perhaps the most complicated problem is anticipating medical bills for severe injuries. In a perfect world, whoever was responsible for the injury covers the medical bills and costs. However, most accidents aren’t clear-cut, which may require months of investigation and litigation. Meanwhile, the injured person’s costs are mounting, and his or her bills are due. The following is a guide for victims on how to deal with these costs.
Tips To Recover Financially After A Car Crash
In no-fault insurance states, the driver’s auto insurance policy may be activated to cover medical costs. In no-fault states, each drivers’ insurance covers their costs. The insurance companies then sort out liability amongst themselves. In fault states, the at-fault driver’s insurance covers the medical bills. However, in some scenarios, the at-fault driver’s insurance may not provide adequate funds to cover the medical bills, which is how lawsuits can get initiated. Moreover, the insurance company is permitted to conduct an investigation which will likely take weeks and perhaps months.
Medical insurance can cover medical bills, while auto insurance payouts are pending. However, the obligation and timeline for when a medical insurer needs to provide coverage varies by state. Moreover, if the injured party recovers a judgment or settlement for his or her injuries from the auto insurer, then he or she will be required to reimburse their medical insurer before any payments for lost wages or other costs are made. Moreover, medical insurance is limited by the injured parties’ policy. For example, it likely won’t cover lost wages unless the insured has supplemental insurance or rehabilitation therapy.
If the delay in payment is due to a legal dispute – for example, the injured parties’ carrier is disputing the amounts due – it is possible to negotiate contingency coverage. In this case, an injured party would retain an experienced attorney who would negotiate with the doctors and medical providers to delay payment in exchange for a medical lien on any settlement or judgment. The medical providers would get reimbursed before any payout to the attorney or injured party. The medical providers will provide accountings of the outstanding costs, which the injured party will include as part of his or her settlement or proof of damages in a judgment.
Other Funding Options
If these funding sources are not available, then injured parties can tap other sources. Some banks offer personal loans for clients with good credit ratings and payment histories. These personal loans usually have 8% to 15% interest rates – or possibly higher. Injured parties can also tap their social networks and families for assistance. Finally, specialized litigation loan companies advance medical and other outstanding costs in exchange for a lien against any final settlement or judgment. These loan companies often charge interest fees. All of these outstanding loans can be accounted for in a final settlement with the insurance company.
Finally, bankruptcy allows injured parties to discharge medical debt. However, bankruptcy does result in long-term financial consequences.