Value Of Insurance Claim

Claimants in Grand Prairie, Weatherford, Arlington, Fort Worth, Dallas, Mansfield, Irving, Hurst, Euless, Bedford, Keller, Azle, Aledo, and any other place in Texas would naturally wonder about the value of any claim they may have against an insurance company. Sometimes the valuation is very simple. An example would be where your car is a total loss and it is insured for $10,000 and you and the insurance company agree it is worth $10,000. You look at your policy and determine that you have a $500 deductible and thus you are entitled to a payout of $9,500.
If only they were all so simple.
Here is an actual case example that is less logical. On February 4, 2011, the Court of Appeals for the Seventh District of Texas at Amarillo issued an opinion styled, Progressive County Mutual Insurance Company v. Natividad Delgado.
Here is some background. In December 2007, Delgado filed a negligence action against George Brent Bailey, Jr. Bailey had been towing an auto which became disconnected and struck Delgado’s pickup. Delgado also sued Progressive for recovery of underinsured benefits alleging that Bailey was underinsured. Delgado settled with Bailey’s insurance company for the policy limits of $25,000. At trial against Progressive, Delgado was awarded $52,968.39 for his medical expenses, $13,258.00 for his past physical pain, $5,000.00 for past physical impairment, and $1,200.00 for past lost earning capacity.
In this case Progressive was entitled to an offset for the $25,000 paid by Bailey’s insurance plus an offset of $2,500 already paid by Progressive as part of Delgado’s PIP coverage.
Here is where the case gets tricky / confusing:
Delgado had health insurance that had allready paid the medicals. Pursuant to the contract between Delgado, the health insurance, and the medical providers, $4,763.77 had been paid to the medical providers as full and final payment on Delgado’s bills with no more money due from Delgado.
At this point a relatively new law that was enacted, Texas Civil Practices & Remedies Code, Section 41.0105, purports to limit Delgado’s claim on his medical bills to what was actually “paid,” the $4,763.77, rather than the amount “incurred”, which was $59,968.39. This is called the “paid” versus “incurred” issue in cases involving medical bills.
So now, instead of a claim for $52,968.39 in medical bills, Delgado was left with a claim for $4,763.77 in medical bills. When this amount is added to the amounts for past physical pain, past physical impairment, and past lost wages, the total is less than the $25,000 already received by Delgado from Bailey’s insurance company. Thus, the court said that Delgado did not have an underinsured motorist claim.
The result in this case is being disputed all over the state of Texas. There have been other appeals level courts that have made ruling on this “paid” versus “incurred” issue. This issue arises out of the Section 41.0105 referred to above. Ultimately this issue will be decided by the Texas Supreme Court.
The arguement on this issue can be very confusing when the following is considered.
1) the law in Texas has long been that courts are not suppose to take into evidence any “collateral” sources of payments for medical expenses. This is called the “collateral source rule.” This means that a Judge or jury is not to consider whether or not there is other insurance available.
2) many times the money recovered for medical expenses has to be used to pay those bills or if the bills have already been paid, to be used to reimburse whoever has made those payments.
3) why should the person who caused the injury get the benefit of a contract the injured person has with someone else – in this case the injured person’s health insurance.
4) this ruling does not take into account the monies that have been spent by the person with insurance to maintain that insurance.
5) this ruling does not take into account the possibility that the person who has the insurance may now get his insurance rates raised or his policy cancelled due to the claim.
These are just five of the many arguements against the fairness of this ruling. There are also many other arguements related to the legislative intent of the law when it was passed and the wording of the statute.
As stated above, this is not the end of this issue. This is a case that will ultimately be decided by the Texas Supreme Court. Also, the Texas Legislature is looking at rewriting this law to make the intent of the law more clear.
There are ways to diminish the harm that results from this law. An experienced Insurance Law Attorney can be useful in navigating this law and optimizing a recovery for his client.

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