Why CO Auto Insurance is Messed Up (rent, health insurance)

[ClimborSki]

Can someone make sense of this for me?

Background: Someone with USAA auto insurance rear-ended me. As a result, I got painful whiplash the next day and couldn't turn my neck. I went to get a CT scan, everything came back normal, but will be seeking a Chiropractor to try and get me feeling normal again.

USAA said they will only pay medical payments in a lump sump after I sign a letter that I am 100% cured and won't sue them. They said I need to go through my own auto insurance and i could pocket the money USAA gives me and I have up to 3 years.

I told my auto insurance this and they confirmed I would need to open up a claim with them to get medical expenses paid for. I asked what my other options were besides a claim, and basically they said the hospital wouldn't want to go through your personal medical insurance since you indicated it was an auto accident.

So it looks like I get to pocket the money for this (waiting awhile to ensure no further issues). This sounds great, but at the same time, I'm like what the heck, that isn't right that they set up a system to allow someone to double dip and pass the higher premium rates to everyone else. Am I missing something?

[Willy702]

It's basically an attempt to front pay you an amount they are required to resolve this matter. If you don't accept it then you will have a fight on your hands as they will lawyer you and that costs them money. So they hope saying here is your 5k, let's end this makes it cheaper and easier. This is where all the injury attorneys on TV want to go to battle and if they succeed you get about a much as you would have and the insurance company had to pay your attorney and theirs plus a ton of administrative costs. So yeah if you say thanks for the money the percentages say they will save giving your money up front.

Colorado insurance regulations requires the medical payments coverage to be provided in every accident regardless of fault. Most insurers will charge you for this and explicitly state it. Even if you refuse they have to get a signed statement that has to be updated often or else they are on the hook. It's there because health insurance providers wanted it there. They are required to cover you if you are in an accident even if it's not your fault. Then they can go after repayment. They said it's just easier to force a policy that covers most treatment in accidents. And that's how magically what might be a few hours of work for them ends up costing exactly 5k.

I'm told there are similar situations in other states like this but can't confirm that. It's probably true though, auto insurance is a volume business so this kind of practice has probably been decided on as the most efficient even if it sounds crooked.

[ClimborSki]

I'm learning much about medical payments. It is surprising that if medical exceeds 5k (or whatever the med pay is), that you need to cover it through your health insurance and wait until all medical expenses are resolved before getting it from the at fault insurance. That could get pretty expensive out of pocket if it is a more serious accident and you're waiting to completely heal.

[Monacles]

USAA adjusters are trash.

I'm not yet licensed to practice law in Colorado but I am licensed in Texas and have done a little personal injury work in the past. I have negotiated with insurance policies through a lot of work. In Texas there is personal injury protection built into your own policy so if you are in an injury there is no-fault coverage for a minimum amount of medical bills. It doesn't hurt your rates, it doesn't require you to cover your property damage under your own policy. It sounds like from posters above that Colorado has something similar. Independently verify that with the Colorado department of insurance.

Definitely never a good idea to accept cash up front on injuries when you don't even know the extent of injury--not to mention you may have remedies for lost wages or pain. Go see a physician and then take what the physician diagnoses and recommends for treatment to a lawyer to discuss your options.

[emm74]

Originally Posted by Monacles

USAA adjusters are trash.

I'm not yet licensed to practice law in Colorado but I am licensed in Texas and have done a little personal injury work in the past. I have negotiated with insurance policies through a lot of work. In Texas there is personal injury protection built into your own policy so if you are in an injury there is no-fault coverage for a minimum amount of medical bills. It doesn't hurt your rates, it doesn't require you to cover your property damage under your own policy. It sounds like from posters above that Colorado has something similar. Independently verify that with the Colorado department of insurance.

Definitely never a good idea to accept cash up front on injuries when you don't even know the extent of injury--not to mention you may have remedies for lost wages or pain. Go see a physician and then take what the physician diagnoses and recommends for treatment to a lawyer to discuss your options.

CO is a tort state, no PIP. And PIP most certainly affects your rates - not on a claims made basis, but overall, in rate setting, no fault states are more expensive than tort states. CO used to be no fault, they switched to a tort system in 2003.

OP, yes, you are double dipping to a small extent, but you are paying a premium for your med pay coverage that allows you to do so. Otherwise, to the extent that your health insurance company pays for your accident related medical treatment, they will put a lien on any bodily injury settlement or judgement you receive to get that money back from the amount you receive from the at fault person's insurance.

[daprara]

i know how it feels... whiplash.

not

[EastwardBound]

A little off topic, but insurance related. Obviously, there are many factors and preferences involved, but wondering what others suggest for insurance minimums, above legal requirements, on newer cars-1-3 years old as well as older cars-10+ years old?

Any suggestions on amounts of protection, above minimum legal requirements, for bodily injury, property damage, uninsured motorist and medical coverage for instance?

[SkyDog77]

Originally Posted by EastwardBound

A little off topic, but insurance related. Obviously, there are many factors and preferences involved, but wondering what others suggest for insurance minimums, above legal requirements, on newer cars-1-3 years old as well as older cars-10+ years old?

Any suggestions on amounts of protection, above minimum legal requirements, for bodily injury, property damage, uninsured motorist and medical coverage for instance?

I would view not in terms of the vehicle, but in terms of how much protection you need based on your net worth. If you hit someone and their attorney runs a search on you, how much do they think they’re going to be able to sue you for?

[emm74]

Originally Posted by SkyDog77

I would view not in terms of the vehicle, but in terms of how much protection you need based on your net worth. If you hit someone and their attorney runs a search on you, how much do they think they’re going to be able to sue you for?

Yes, this is the relevant factor. Third party insurance is to protect your assets and has nothing to do with the age or value of the car you are driving.

And of course Uninsured Motorist is to protect yourself - although you cannot get higher limits for UM than you carry for BI, so you can't protect yourself more than the protection you provide to others via third party BI coverage.

Generally speaking, if you have average assets and carry 100/300 limits, most attorneys will not try to go after you personally to get a judgement above the policy limits. Obviously 250/500 is even better. Above that, you are looking at an Umbrella policy, not increased limits on your auto policy.

But if you own no assets, rent rather than own a house, etc., 100/300 is probably sufficient.

[EastwardBound]

Originally Posted by SkyDog77

I would view not in terms of the vehicle, but in terms of how much protection you need based on your net worth. If you hit someone and their attorney runs a search on you, how much do they think they’re going to be able to sue you for?

Originally Posted by emm74

Yes, this is the relevant factor. Third party insurance is to protect your assets and has nothing to do with the age or value of the car you are driving.

And of course Uninsured Motorist is to protect yourself - although you cannot get higher limits for UM than you carry for BI, so you can't protect yourself more than the protection you provide to others via third party BI coverage.

Generally speaking, if you have average assets and carry 100/300 limits, most attorneys will not try to go after you personally to get a judgement above the policy limits. Obviously 250/500 is even better. Above that, you are looking at an Umbrella policy, not increased limits on your auto policy.

But if you own no assets, rent rather than own a house, etc., 100/300 is probably sufficient.

Thank you.