When you are injured in an accident and you receive medical care for your injuries, there are charges for that from the health care providers. Your automobile insurance is the primary source to pay these bills.
Your personal injury protection (PIP) benefit under your no-fault auto policy is the primary source responsible to pay for your medical care after an accident. All auto policies contain this coverage in Florida. PIP pays up to $10,000, 80% for medical bills and/or 60% for lost wages. There is a $2000 deductible that must be met before any PIP benefits are paid.
Some policyholders also purchase Medical Payment coverage which pays up to $5000 or more toward medical bills after the PIP benefits are exhausted.
If there are charges that are not paid after your auto coverage is used, then you look to your health insurance to pay the remaining unpaid bills. Health insurance is secondary coverage to your auto insurance and is not responsible for any payments until your auto insurance is exhausted.
However, when your claim is resolved, either by settlement or jury verdict, your health insurance is entitled to be repaid some, if not all, of the funds they paid for your medical expenses. This is called SUBROGATION. It is part of all health insurance policies. There are very strict laws that make the claimant responsible to repay the health carrier. Also, your attorney is secondarily liable if repayment isn’t made by the client.
You do not have to repay your auto insurer for the PIP payments but you do have to repay them for any medical payments they make under your MedPay coverage.
Therefore, after paying your attorney fees and costs, the subrogation claims discussed above also must be paid before you receive your net recovery from the settlement. SUBROGATION is the theory that if you had not been injured and incurred medical expenses because of the fault of someone else, the health insurer would not have had to pay the medical bills. If you are compensated for your injuries by the at-fault party, then they have the right to recover the sums they paid out from your recovery.