There are a couple reasons.
When they are trying to figure out how much to pay you for an accident, the other driver’s insurance company will calculate the total paid toward your medical bills by your health insurance company – and by you through copays and deductibles, and expenses not covered – and then multiply that by a number. The result is an estimate of what they think they will owe on your lawsuit.
For instance, if your health insurance paid $4,000 to your doctors and hospitals for treatment from your accident, then the other driver’s insurance might look at that number and decide to pay between $7,000 and $12,000 in total, depending on the formula they use.
The car insurance companies use different formulas, and they don’t tell you what they are. They also look at other factors – whether you are permanently injured, whether your injury is to a part of your body where you were injured before, whether there was much damage done to either car in the wreck, whether you will need surgery, whether you have lost wages, whether you have a scar.
Also, when your health insurance pays a bill caused by an accident, it has the right to be repaid out of your settlement. This is called subrogation. So you – and your attorney – need to know how much your health insurance company will be looking for out of your settlement.
The bottom line, though, is that the more your health insurance company pays – and the more that you pay through deductibles and copays – the more the other side’s auto insurance will pay.
If you want to know more about how this works, call me, Bill Strubbe, a Cincinnati Personal Injury Attorney. My phone is 513-621-4775. There is no charge for talking to me.
Other lawyers refer their clients to me. And if you decide you‘d rather hire someone else, that’s OK.
Because all situations are different, and because there may be other facts pertaining to your case that I don’t know about, you should not rely on this answer for legal advice. I am not your attorney, and no lawyer client relationship has been formed. All discussions are limited to Ohio law unless otherwise indicated. And past performance cannot be used to predict future results.