Why isn’t the other drivers insurance company covering my medical bills up front?

The Collateral Source Rule in Maryland

By: Natalie Ulrich

A question I get asked often is “why isn’t the other drivers insurance company covering my medical bills up front?”

Typically, a bodily injury claim is considered pending until your medical treatment is complete. At that time, your attorney will compile a medical demand package to send to the liability carrier for consideration for a bodily injury settlement offer. Whether a settlement is reached, or a verdict rendered in court, any outstanding medical bills would be paid out of that settlement and your attorney’s fee. Some private doctors’ offices will agree to hold your medical billing account until such a time that the case does reach a settlement, however hospitals are less likely to agree to do this without a small payment plan in the meantime. This is where filing a Personal Injury Protection (“PIP”) and/or Medical Payments (“Medpay”) claim could be beneficial in keeping those hospital accounts out of collections.

Next, clients have asked “if my PIP, Medpay or health insurance carrier pays a medical bill up front does that mean that the other driver’s insurance doesn’t have to pay it?” In Maryland at least, the answer to that question is NO! Even if your PIP, Medpay, or health insurance carrier pays a bill related to the auto accident, the collateral source rule in Maryland (in short) states that you may recover the amount of your bill regardless of if that bill was paid by a first party benefit insurance carrier. In Maryland, the liability insurance company is not given a credit for, nor may they offset for paid bills, as they are able to do in some other states.

While every case is a little different, 9 times out of 10 we encourage clients to utilize these benefits that they pay extra for on their own insurance policies. The collateral source rule is only one of the many positives these benefits bring to a case.