True story. My clients were clobbered by a commercial truck in Pennsylvania. The husband had $70,000 in medical bills, which were paid by his health insurance company. For months the husband and wife had been dealing on their own with the trucking company’s insurance adjuster. When the insurance company finally made them an offer over a year after the crash, the adjuster told them: “From our offer of settlment, you have to repay your health insurance company for the $70,000 it paid for your medical bills” (this is known as "subrogation"). Not happy with the offer, they called me, and brought in their health insurance manual.
Sure enough, the health insurance manual contained a standard “subrogation” clause, which generally provides that the injured person must reimburse the health insurance company out of his or her settlement for any accident related bills it paid. However, upon reading the manual further, I discovered that the health insurance company made a colossal mistake in its subrogation clause: its claim of reimbursement was limited to dental bills paid due to a collision. The manual had inadvertently omitted “medical bills” from its subrogation clause!!! Translation: the health insurance company had no right to be reimbursed for the $70,000 it paid in medical bills.
The upshot? The adjuster actually gave bad legal advice to the clients that they had to reimburse their health insurance company. When I took the case, I wrote the health insurance company a letter and informed them that, by virtue of their own language, my clients did not owe them a penny in reimbursement, since my client had $70,000 in medical bills but no dental bills! After a few weeks, I got a return letter from the health insurer acknowledging that we were right, and they dropped their reimbursement claim. Obviously, they goofed in writing the manual and were therefore stuck with their own limiting language.
As it turns out, both the trucking company’s insurance company and the health insurance company were wrong! Both assumed, wrongly, that the $70,000 reimbursement claim was valid. The adjuster who was dealing with the clients did nothing sinister; he simply had no interest in checking the clients’ benefits manual and was content to assume that because the health insurance company sent him a letter claiming reimbursement, their claim was therefore valid. And the clients' own health insurance company was either totally ignorant of its own provisions in its manual, or was deceptively trying to pull one over on the clients. When I informed the adjuster during negotiations that the health insurance company had abandoned its claim for the $70,000, he was shocked.
Simply reviewing the health benefits manual and sending a few letters saved my clients well over $70,000 when we settled the claim. It is yet another example of application of "Rule No.1," and proves that insurance companies have no vested interest in taking the time to look out for the injured person’s best interests.
The story above is an excerpt from my FREE book "Your Ohio Accident...And How To Level Your Playing Field." To find out what "Rule No. 1" is, and other information about what you can expect if you're involved in a collision, simply click on the cover of the book on the blog home page.
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