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How Clawback Affects Your Personal Injury Claim


Health insurance is a necessity in America. Getting sick and not having health insurance is one of the leading causes of bankruptcy. In fact, even with insurance many Americans still go bankrupt when they get struck by a major illness or injury. Two thirds of bankruptcies are tied to medical expenses, according to CNBC. As a driver, pedestrian, cyclist, or motorcyclist, health insurance is all the more important, as all of these forms of transportation carry significant risks, particularly those that do not involve being wrapped in a steel cage of protection. However, your insurance company is not always on your side.

Battling Your Own Insurance Company

From health insurance companies denying claims and denying procedures, to not paying for hospital and doctor’s fees that are out of network, the typical American seems to be at odds with their health insurance provider one way or another. As to be expected, four in 10 Americans are dissatisfied with their health insurance costs according to Gallup. One circumstance in which your health insurance company works against you that you may not be aware of arises from personal injury claims. Clawback is a term used to describe how an insurance company takes “claws back” money awarded to you in settlements or lawsuit verdicts, and it can be detrimental to your personal injury claim by significantly reducing your compensation.

How Clawback Works

Let us say that a victim gets injured in an auto collision and suffers a compound fracture in their leg, severe whiplash, and a concussion that cause them to miss work for three weeks, resulting in lost wages of $3,000. Their past hospital bills, which mostly paid for by the victim’s own insurance company, and future physical therapy expenses for the next few months amount to $40,000 in total, while their pain and suffering is valued at $20,000. Damage to their car amounts to $10,000. Their total claim is worth $73,000 and, with the help of a personal injury attorney, that is what settlement comes to with the at-fault driver’s insurance company. One third of that $73,000 goes to their attorney for their legal services, leaving the plaintiff with $48,180. When the settlement is reached and paid out, the plaintiff’s own insurance company may clawback a significant portion of the medical expenses that they initially paid for. And, these medical expenses, in this example, are the largest aspect of the plaintiff’s damages, amounting to $40,000. If the insurance company claws back the full $40,000, that would leave the plaintiff with just a little over $18,000.

How To Protect Your Settlement From Your Health Insurance Company

Health insurance companies generally do not clawback 100 percent of the medical expenses that they incur. Sometimes, insurance companies do not clawback anything. It is important to work with an attorney to find out what your policy says in terms of clawback, and/or to negotiate an agreement with your insurance company before the settlement is finalized.

Our Orlando Personal Injury Attorneys Can Help You Get Started Today

By working with an attorney, you can maximize your compensation and minimize the clawback from your insurance company. To get started on your injury claim today, call the experienced Orlando personal injury attorneys at the Payer Law at 407-307-2979 to schedule a free consultation.



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