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

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 information 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 for a Car Accident 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 the 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 Offer from the Insurance Company?

No. If an insurance company is offering you less than you believe a jury would find is fair, 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. You rarely see a bad faith claim filed against a third-party liability insurance company. 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.

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?