Auto Insurance Forum

My teenage son was involved in an accident in someone else's car. He had very serious injuries that required two surgeries and five weeks in the hospital, and he's still receiving therapy two months later.

The adjuster for the driver's insurance company said my son would receive the maximum amount from the driver's liability policy, which has a policy limit of $50,000, because his medical bills would exceed that amount. My son also received an extra $1,000 for medical expenses before his health insurance took over, but we still had to pay some money out-of-pocket.

My questions are: What is the difference between the medical payment amount ($1,000) and the liability amount? Can the health insurance company ask for reimbursement of their payments? The adjuster said they probably wouldn't; he said my son would end up with "pocket money." What does all this mean?

Jack, Maine

In Maine, state law requires drivers to carry at least $50,000 of auto liability insurance for the injury or death of each person involved in a car accident where the policyholder is at fault. In addition, the state requires an extra $1,000 for medical expenses for each person in a policyholder's car at the time of the accident. It sounds like your son is eligible to collect under both of these coverages.

Your health insurer may try to recoup some of its costs incurred while your son was under medical care after this accident, by filing a claim for part of your settlement. That's called subrogation, and it's a fairly common practice. Your health insurance policy may even contain a clause specifically allowing the insurer to subrogate.

The settlement also should cover all of your out-of-pocket costs for your son's medical care. Auto insurance settlements can also include payment for "pain and suffering." When the adjuster talked about "pocket money," he may have been referring to money paid above and beyond medical expenses, meant to compensate your son for the pain and suffering he endured as a result of this accident. Of course, if your medical bills do exceed $50,000 — and your health insurer subrogates to recoup some of its costs — you may not be left with much money for pain and suffering or for your portion of the medical expenses.

If you carry uninsured/underinsured motorist coverage, you can make a claim on that policy for any remaining expenses not covered by the $50,000 settlement. If you don't have this coverage, you will have to sue the at-fault driver for your remaining expenses. I suggest you read When to hire a personal injury lawyer for more information on lawsuits related to auto accidents.

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