Who Pays for the Medical & Car Repair Bills After an Auto Accident?
UPDATED: June 19, 2018
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The answer to this question depends on your own financial resources and the circumstances of the accident.
Typical sources of compensation for damages sustained in a car accident include:
Out-of Pocket - When the damages sustained are minor and do not cost a lot of money, paying for the loss out-of-pocket should be considered. There is no third party involvement when you pay for your own loss, no long investigation, no change in your insurance and generally less hassle. When your losses exceed what you can handle, other sources of compensation should be explored. In the case of minor injuries in a car accident, you can likely represent yourself in the claim as opposed to hiring an attorney.
Your Car Insurance Company - Whether your insurance will compensate you for your loss depends on the insurance contract. In many contracts, there are considerations for both first party (you and your vehicle) and any third parties (passengers, other drivers and their property). Some contracts provide medical coverage for personal injury of the insured and your passengers. The policy may pay for collision repairs and possibly for a car rental while your damaged car is being repaired. Before making a claim with an insurance company, many people consider whether it will be less expensive for them to pay for the loss out-of-pocket before relying on their insurance, because accident payments could raise your premiums. The potential of increases in your premium must be balanced against your ability to pay out-of-pocket, including any deductibles. The larger the loss, the more likely you are to want recovery from your insurance company.
Your Health Insurance Provider - You may have private health insurance or belong to an HMO (Health Maintenance Organization). In the event of a personal injury from a car accident, you can ask your health insurer to pay for medical treatment. Sometimes private health insurance plans or HMOs require you to seek recovery from your auto insurance company before the health organization will pay or provide medical treatment.
Other People Involved in the Accident - In addition to the three sources above, you may be able to seek recovery from other people who were involved in the accident. Your ability to recover money from another driver may be limited by the laws of the state in which the accident occurred (not necessarily the same state where you live). The state where the accident occurred may have a no-fault law where each person involved in an accident pays for their injuries through their own insurance, or a fault law, where the party at fault or who caused the accident pays for damages. If you are at-fault for an accident that occurred in a fault state, contact your insurance company. It is the company's job to defend you in court or negotiate a settlement. When the other party is at fault in a fault state, you would seek compensation from their insurer, or your insurer would seek compensation from their insurer.
See State Limits on Certain Car Accident Damages for more on seeking compensation in your state.