Do I have to pay back my auto insurance company for medical payments coverage used after a car accident?

August 21, 2011

Thumbnail image for 1314902_medical_doctor.jpg
It depends. Let me explain. Georgia passed legislation in 1991 that repealed Georgia's automobile no-fault insurance. Since the repeal of no-fault insurance, medical payments coverage, which is commonly known as med pay coverage, has increased in popularity among Georgia motorists. Basically, med pay is an optional coverage on your auto insurance that pays the insured's medical and funeral expenses caused by a car accident. It is an excellent investment and is quite inexpensive. I highly recommend that every motorist obtain this optional coverage with their automobile insurer.

What is the applicable Georgia statute?

O.C.G.A. 33-4-6 covers the payment of med pay benefits. Basically, the statute mandates that insurers make payment within sixty (60) days after a demand has been made for payment. If the insurer fails to make payment within this time period and the refusal is in bad faith, then the insurer may be liable or responsible for up to 50 percent of the amount owed or $5,000, whichever is greater, plus legal fees. If you believe that your insurer has refused or rejected to pay your medical bills in bad faith, then you should contact an experienced personal injury lawyer immediately.

What does med pay cover?

Typically, the standard med pay insurance endorsement requires the insurer to pay reasonable bills that were incurred for necessary medical and funeral expenses which were triggered by bodily injury caused by accident and sustained by an insured. These expenses usually need to be incurred within three years of the date of the accident - however, an insurer can allow for a longer period of time in its own policy. O.C.G.A. 33-34-2(1).

To Whom and What does the med pay coverage apply?

Coverage generally applies to the named insured on the policy, the insured's spouse, any relative of the insured that resides with insured at time of the car wreck, and also any passenger in insured's vehicle at the time of the car accident. Typically, the coverage applies to the above individuals who are occupying or struck by a car while situated in the insured automobile.

When I settle my personal injury case do I have to pay back or reimburse my med pay insurance company out of my settlement?

Effective July 1, 1997, Georgia enacted a statute that requires the insured injured person to pay back their insurer for medical and disability benefits only in cases where such person has been fully compensated for all economic and noneconomic losses. O.C.G.A. 33-24-56.1. Economic losses can be described as financial losses and damages directly related to a car wreck such as your doctor bills, chiropractic bills, physical therapy bills, hospital bills and loss of wages or earnings. Although not exclusive, noneconomic losses can be thought of as physical pain and suffering, mental pain and suffering, disfigurement and loss of enjoyment of life. These losses are typically described as quality of life losses.

Generally, if you believe or claim that your personal injury monetary settlement from the car accident is less than your total economic and noneconomic losses incurred as a result of your injury, then under O.C.G.A. 33-24-56.1(g), the insured or the insured's attorney must send mail a letter to the insurer by certified mail or statutory overnight delivery (e.g., FedEx or UPS) that requests the insurer to specifically itemize payments for reimbursement, including the name of the payee (i.e. medical doctor, etc.), the dates of service or both, and the amounts thereof. This letter must be sent at least 10 days before consummation of your personal injury settlement or commencement of any trial.

If the insurer does not provide you with the requested information within 10 days of the receipt of your letter, then the insurer loses the right to enforce reimbursement of the medical payments that it has made on your behalf. In practice, I send a 10-day letter out on almost every case on the day that I have reached settlement with the tortfeasor's insurance company. To be safe, I do not deposit the check or have my client sign the settlement papers (e.g., release) until after 10 days have expired from the receipt of the notice by the medical payments insurer.

If the insurer does not respond within 10 days as outlined above, I generally disburse the proceeds to my client. If the insurer does respond within the 10-day period, I also generally disburse the proceeds to my client. In my opinion, the insurer has the burden of proof to prove by a preponderance of the evidence that my client's recovery exceeds his/her total economic and noneconomic losses incurred as a result of his/her injury. I think that this burden of proof is most difficult (particularly in regard to pain and suffering) and expensive for an insurer and to-date, I have not had an insurer file for a declaratory action or suit against any of my clients in this regard. However, if you take your case to trial and the jury awards you a sum of money, then I think the insurer may present an argument that you have been fully compensated under the meaning of the statute.

The above is a general outline and is not intended to explicitly or implicitly provide any legal advice. My aggressive approach as listed above may not work in all situations, and an insurer may take a more ominous approach against an unrepresented insured. If you have questions regarding your medical payments reimbursement, then please contact an experienced car accident attorney to discuss the matter in depth at the earliest opportunity.

The Law Offices of Kevin C. Ford is currently accepting auto collision and medical payment bad faith cases throughout Georgia. If you or a loved one has been injured as the result of the negligence of a motorist, then please contact an experienced injury attorney for a free consultation.