When you’re injured in a preventable accident, you’re probably going to have high medical bills to contend with. Fortunately, most insurance companies can cover common injuries, but there are times when medical needs are both ongoing and expensive. According to one study, in-patient treatment costs for traumatic brain injuries can cost up to $400,000. That doesn’t include ongoing care, lost wages, pain and suffering, and other financial losses.
If you’re injured in Texas and the at-fault party’s insurance doesn’t cover all of your expenses, what happens next? Many accident victims assume the insurance company will pay for everything, only to find out that policy limits cap how much they can recover. In this article, we’ll go over what your legal options are if your medical bills exceed policy limits.
How Insurance Policy Limits Affect Your Compensation
Insurance policies have coverage limits that determine the maximum amount an insurer will pay for an accident. In Texas, drivers must carry at least $30,000 per person and $60,000 per accident in bodily injury liability coverage. This means if you’re injured by a driver with minimum coverage, the most their insurer will pay for your medical bills is $30,000, even if your treatment costs far more.
For catastrophic injuries, hospital stays, surgeries, and rehabilitation can quickly push medical expenses well beyond what an insurance policy covers. Once the insurer pays out the maximum, they are not legally required to cover any remaining costs. That leaves you responsible for the balance unless you pursue additional compensation through other means.
Options for Covering Medical Bills That Exceed Policy Limits
When medical expenses surpass the negligent party’s insurance coverage, accident victims are naturally worried. The thought of covering thousands (or even hundreds of thousands) of dollars in medical bills can be alarming. Fortunately, Texas law provides several options to help fill the gap. The best approach depends on your insurance coverage, the at-fault party’s financial situation, and whether legal action is an option.
Filing a Claim Against Your Own Insurance
One of the fastest sources of compensation is to file an accident claim under your own auto insurance policy. Depending on your coverage, you may be able to recover some or all of the remaining expenses. The most relevant policies for covering medical bills include Personal Injury Protection (PIP), Medical Payments Coverage (MedPay), and Uninsured/Underinsured Motorist (UM/UIM) coverage.
Personal Injury Protection (PIP) Coverage
Personal Injury Protection (PIP) is one of the most valuable types of auto insurance coverage available to Texas drivers. Unlike liability insurance, which only covers damages for other parties if you’re at fault, PIP directly benefits you by covering the following, regardless of fault.
- Medical expenses related to the accident, including ambulance fees, hospital visits, surgeries, and rehabilitation.
- Lost wages if severe injuries prevent you from working.
- Essential services such as household help if you’re unable to perform daily tasks due to your bodily injuries.
Texas law requires auto insurance companies to offer at least $2,500 in PIP coverage, but policyholders have the option to increase their limits (typically up to $10,000 or more). While drivers can decline PIP in writing, doing so could leave them financially vulnerable after an accident, especially when medical bills exceed the at-fault driver’s auto insurance policy limits.
Medical Payments Coverage (MedPay)
Medical Payments Coverage, commonly known as MedPay, is an optional type of auto insurance that helps cover medical expenses after an accident, regardless of who was at fault. While MedPay and Personal Injury Protection (PIP) serve similar functions, MedPay is more limited in what it covers. It strictly pays for medical costs and does not provide compensation for lost wages, essential services, or long-term recovery expenses.
However, MedPay can still be a valuable safety net, particularly when an at-fault driver’s insurance does not cover all of your medical bills. In situations where policy limits are exhausted, MedPay can step in to help pay for outstanding hospital bills, doctor visits, ambulance rides, and other immediate medical expenses.
Uninsured/Underinsured Motorist (UM/UIM) Coverage
If the at-fault driver has no insurance or too little coverage, UM/UIM coverage can help pay for medical bills, lost wages, and other expenses. Many drivers assume they are covered for these situations, but UM/UIM coverage is optional in Texas, meaning you must add it to your policy.
Although Texas law requires drivers to carry minimum liability insurance many drivers either:
- Drive without insurance, violating Texas law.
- Carry only the minimum coverage, which is often not enough for serious injuries.
UM/UIM coverage fills the gap, ensuring that you are not left with unpaid medical bills after an accident caused by an uninsured or underinsured driver.
Uninsured Motorist (UM) Coverage
If an uninsured driver causes an accident, you could be stuck paying for your own medical bills, lost wages, and other damages unless you have Uninsured motorist coverage, which acts as a substitute for the liability coverage that the at-fault driver should have had. It covers:
- Medical provider expenses
- Lost wages
- Pain and suffering damages
- Property damage
- Funeral expenses in fatal accidents.
UM coverage applies in multiple scenarios, not just when an uninsured driver causes an accident. It also covers hit-and-run accidents. If a driver hits you and flees the scene, leaving you with injuries and no way to track them down, your UM policy can step in to cover your medical expenses.
Underinsured Motorist (UIM) Coverage
Even when drivers do have insurance, they may only carry the minimum amount required, which is often not enough to cover medical costs in serious accidents. Underinsured Motorist coverage fills the gap when the at-fault driver’s policy limit runs out before all of your expenses are covered.
To qualify for UIM coverage, you must:
- File a claim against the at-fault driver’s insurance first.
- Collect the full amount of their policy limits.
- Use your UIM coverage for the remaining balance.
Many Texas drivers decline UM/UIM coverage to save money on their premiums, but this can be an expensive mistake after an accident. A serious injury can cost hundreds of thousands of dollars, yet Texas’ minimum liability coverage is only $30,000 per person. Without UIM coverage, you could be stuck with medical bills far exceeding that amount.
Suing the At-Fault Party
If you’ve been in a serious accident and your medical bills exceed the at-fault driver’s insurance policy limits, you may be left wondering how to cover the remaining costs. While insurance companies typically only pay up to the limits of the at-fault driver’s policy, a personal injury lawsuit may help you recover additional compensation.
If you file a lawsuit against the at-fault driver, you can seek fair compensation for additional damages that go beyond what their insurance company is willing to pay. They include:
- Medical expenses beyond policy limits
- Lost income from time off work
- Pain and suffering damages
While a personal injury claim can help recover damages that exceed insurance limits, there are several challenges and considerations to keep in mind.
- Even if you win a lawsuit, collecting the judgment can be difficult if the at-fault driver lacks assets or income to pay the remaining damages. If the defendant does not have significant savings, personal assets, or high wages, you may struggle to recover the full amount. An experienced personal injury attorney will investigate the defendant’s financial standing before filing a lawsuit.
- Unlike insurance claims, which can often be settled in a few months, lawsuits can take a year or longer to resolve, especially if they go to trial. Factors that impact the timeline include the case itself, whether the insurance provider pushes back, and court schedules or backlogs.
While lawsuits take longer than auto accident settlements, they often result in maximum compensation, especially if your accident injuries are severe. An experienced personal injury lawyer can help move the process along efficiently while ensuring your case is thoroughly prepared.
How Texas Law Affects Compensation for Medical Bills
Texas law provides several legal avenues for accident victims to recover compensation, but certain legal rules can impact your ability to collect damages.
Proportionate Responsibility (Modified Comparative Fault)
Texas follows a 51% rule, meaning you cannot recover compensation if you are more than 50% responsible for an accident. If you are partially at fault, your total compensation will be reduced by your percentage of fault. For example, if your damages total $100,000, but you are found 20% at fault, your compensation would be reduced to $80,000.
Caps on Non-Economic Damages
While Texas does not cap damages in most personal injury cases, medical malpractice claims are subject to limits. If a healthcare provider’s negligence caused your injuries, non-economic damages (such as pain and suffering) are capped at $250,000 per defendant, with an overall cap of $750,000.
Why Hiring a Personal Injury Lawyer Matters
Insurance companies are not in the business of paying out large settlements without a fight. They often try to minimize payouts and leave injured victims responsible for medical bills they should not have to pay. A skilled attorney knows these tactics and can fight back to ensure that you recover the compensation you need.
Without legal representation, accident victims may feel pressured to accept lowball settlement offers from insurance adjusters eager to close the case quickly. These offers often fail to cover long-term medical care, lost wages, and pain and suffering. Many victims sign settlement agreements too soon, only to realize later that they still owe thousands in unpaid medical expenses.
Once you accept a settlement, you cannot go back and ask for more money. An experienced car accident lawyer confirms that any settlement offer fully accounts for your current and future financial needs before you sign anything.
Real-World Example: What Happens in a Policy Limit Case?
Imagine a Texas driver, Alex is injured in a car accident caused by another driver, James. Alex’s medical bills total $100,000, but James only carries the minimum $30,000 liability coverage. Without legal help, Alex may be stuck paying the remaining $70,000 out of pocket. However, with a personal injury attorney, Alex can explore additional options:
- Using PIP or UM/UIM coverage from his own policy to cover some of the remaining balance.
- Filing a lawsuit against James if he has assets that can be pursued.
- Negotiating with hospitals to reduce outstanding bills.
With the right legal representation, Alex may be able to recover the full cost of his medical treatment, lost wages, and other economic and noneconomic damages without having to go into debt to do so.
Take Action Now: Call a Texas Personal Injury Lawyer
If you’ve been injured in an accident and your medical bills exceed the at-fault party’s insurance limits, a car accident attorney can help you explore every available option to recover the financial compensation you need.
At Texas Law Guns, Injury & Accident Lawyers, we fight to protect injury victims from being stuck with medical bills they shouldn’t have to pay. Our team has extensive experience negotiating with insurance companies, pursuing additional compensation, and ensuring that clients receive the financial support they need. To schedule a free initial consultation, call our law firm at (210) 800-0000 or contact us online today.
Alexander Begum has tried over 50 trials to verdict and tried or settled over $500 million in cases. Alex is a founding shareholder of the Texas Law Gun, Injury and Accident Lawyers.