Here's a perfect example of a case where the driver of a car who hit a young man crossing the street, did not have enough insurance coverage, leading to insufficient compensation for his injuries:
This particular man was in a shopping center crossing the street when he was hit by a car entering the shopping center. The driver was going about 25-30 miles per hour. He hit the man squarely on the left side of his body, causing him to go flying through the air and land about ten feet from where he started. The injured man was rushed by ambulance to the closest trauma center where he was diagnosed as having a broken femur (the largest bone in your body), trauma to his face, and a bleed under his skull. The victim required a tracheostomy; a hole made in his windpipe to allow a tube from a ventilator to help him breathe. This injured victim spent more than three weeks in the hospital.
When he was discharged, he was sent to a rehabilitation facility and ultimately made his way home.
The driver of the car had insurance. However, when I investigated the insurance policy he had, it turns out it was a "limited" policy. This means it was a relatively low policy amount. Shortly after I was able to document all of my client's injuries to the insurance company, they promptly paid the full insurance policy since they recognized that the injuries my client suffered far exceeded the available insurance in this case.
Q: What other options were available to this young man after the insurance company "tendered" (paid) the insurance policy?
A: One option would have been to sue the driver personally and try to get a judgment against him. If successful, then I would be able to enforce the judgment by seizing his property in order to fulfill the judgment. However, after investigating this possibility, we learned that the driver had no assets- at least none that were in his name. Bringing a lawsuit against him, just to get a "paper" judgment would serve the client no purpose.
THE GOVERNMENT STEPS IN...
In this case, my client had been receiving medicare benefits because of a pre-existing disability. When Medicare learned (as they always do) that my client had received some compensation for his injuries, they asserted a "lien" against the proceeds of his case. This meant that they were asserting their right to recoup money that Medicare paid for his hospital and medical bills arising out of this car accident. The medical bills alone were astronomical. They were over $300,000! Medicare wanted everything that my client would receive as his share of the settlement. In effect, this young man potentially would get nothing as a result of his injuries.
I appealed to Medicare advising them that it would be tragic if this young man who was severely injured were required to pay back Medicare everything he was awarded in the settlement. Yet Medicare made a reasonable argument: Who else paid for his medical bills when he was in the hospital? Nobody. He did not have any other health insurance. Medicare did not expect to get reimbursed for paying his medical bills. But, when an injured victim brings a lawsuit seeking compensation from the driver of a car, bus, truck or someone else- and is successful, then Medicare steps in and says "You are now required to reimburse us." Many times Medicare will try to negotiate with you, depending upon the amount you recover. Yet the bottom line is that they must be repaid.
If your attorney ignores a Medicare lien, they do so at their peril. If your lawyer pays you your net share of the settlement without allocating money for Medicare, this is what will happen. Medicare will file a lawsuit against your attorney in federal court. They will ask not only for the money that they were supposed to recover, but also ask for three times the amount (called treble damages). Needless to say, if your lawyer has reached this stage, he has significant problems. The government is not required to go after the client (you, the injured victim). Your lawyer may try to get the money back from you, but what if you already spent it? Now the lawyer has even bigger problems.
The bottom line? Medicare must be repaid.
The bottom line for this client? He got the short end of the stick since the driver of the car that hit him did not have sufficient car insurance to cover the severe injuries he received. Then, the government stepped in and asked for the total amount of money to cover at least some of their expenses. After an appeal to Medicare, they were "generous" enough to allow my client to take home a token amount of the original compensation he was entitled to receive.
What is the moral of this story? Carry enough car insurance on your insurance policy to cover a serious injury. Then buy an "umbrella" policy (also known as an excess policy) to protect you and your assets in the event your main insurance policy is insufficient to pay compensation to someone seriously injured.
Thanks for taking the time to become informed.
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