Can a Car Insurance Company Deny Payment for My Medical Bills After a Car Wreck in Texas?

People ask us this question all the time. It usually happens something like this:

You are in an accident through no fault of your own. You get sent bills by the hospital, the emergency room doctor, the radiologist, the ambulance company and they all add up. Thankfully, the other driver had liability insurance. You submit the bills to the friendly agent who then offers to settle your case for half your medical bills.

Is this legal?

Unfortunately, yes. It is.

Is it fair?

Probably not.

How Auto Liability Insurance Works

Texas is a liability insurance state for purposes of auto insurance. That means that all drivers are required to carry insurance that will pay any judgment that is taken against a driver for a collision that they cause negligently. An insurance policy is merely a contract to pay a judgment up to a stated maximum amount and to defend the driver when they are sued. Liability insurance companies are under no legal obligation to pay ANY of your damages (including medical bills) until a jury orders it to do so OR it becomes reasonably clear that the damages exceed the policy limits and a demand is made to settle within the policy limits. (See Stowers demand for more on the latter.)

If you and your insurance company cannot agree on a settlement amount that both parties can live with, then you must take the case to trial and let a jury decide.

Does a Jury Have to Award Me My Medical Bills If I Win?

No. When you go to trial, it is your lawyer’s burden to prove that the medical bills you incurred were both reasonable in amount of the charge and necessary (i.e. proper medical care) and that the bills were caused by the other driver’s negligence.  If your own negligence is found entirely or partially the cause of the collision you with either lose all of your damages (if your negligence is found to be more than 50%) or lose that part of your damages represented by the percentage of your contributing negligence.

Because a jury does not have to award you all of your bills, insurance companies will often argue that they do not owe all of your bills because of your own negligence or because they believe the doctor’s  over-charged rather than charging the amount considered reasonable in your area. It is important that you hire a car accident attorney experienced in fighting against these kinds of arguments in court.

Do I have to Accept the Amount the Insurance Company Says is Reasonable?

No. If an insurance company is offering you less than the medical bills, you have a right to reject that offer and file a lawsuit against the driver. This forces the insurance company to step in and defend their insured and pay any judgment you take against them. If you find yourself in this situation, you should consult a personal injury lawyer before accepting any settlement or attempting to bring a lawsuit on your own.

Do Auto Insurance Companies Have to Make Settlement Offers in Good Faith?

Your auto insurance company owes you a duty of good faith and fair dealing because you are in contract with them. However, when you are hit by someone else, you are typically dealing with an insurance company that you are not in contract with. Thus, the other driver’s insurance company owes you no duty of good faith and fair dealing.  There are some very vague insurance code obligations to “negotiate in good faith” when liability becomes “reasonably clear.”  However, since the amount they are liable for can be disputed in many different ways in court, it is extremely difficult to ever say the amount they are liable for is reasonably clear.

This is not to say that they will not try to settle with you. Many of them will try to negotiate a settlement. It just means they have the right to dispute the amount you claim you are owed.

What is Insurance Bad Faith?

Insurance bad faith typically refers to insurance companies engaging in what are considered “unfair settlement practices.”  There are certain actions an adjuster cannot do such as: lying about coverage, misleading claimants about a policy or misstating facts material to the policy and its coverage, failing or refusing to acknowledge a claim timely, or failing to attempt to resolve matters after liability has become reasonably clear—which is almost always a debatable point. Rarely, do you see a bad faith claim filed against a third-party liability insurance carrier. More frequently, but still not so common are bad faith claims made against underinsured motorist carriers—because they are first party and therefore, have more duties.

Do I Have to Take Their Settlement Offer?

No. You have the right to reject their offer and to take the case before a judge and/or jury to have it decided.  Personal injury attorneys handle these types of claims.

What Does a Lawyer Cost?

At Simmons and Fletcher, P.C., our initial consultation is free and without any obligation to sign. If you do decide to hire us after getting free advice, we work on a contingency fee basis. This means you do not pay us a single dime unless we make a recovery for you in your case.  Thus, there is no upfront cost to hiring a lawyer and you will not pay us unless we win your case. Why not get a free consultation today?

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Paul Cannon

Paul Cannon has practiced personal injury trial law since 1995. He is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization since 2005. He has earned recognition as a Super Lawyer by Thompson Reuters in 2017-2019, and as a Top 100 Trial Lawyer by the National Trial Lawyers Association in 2017. He is a Shareholder, trial lawyer and online marketing manager at Simmons and Fletcher, P.C. His legal writings have been published by the Texas Bar Journal,, HG Legal Resources,, and others. He has been asked to give educational talks and media interviews regarding personal injury law issues..