Can you recover all your medical bills from a car accident, or just the amount your health insurance paid for the bills? This question comes up in nearly all personal injury claims from car accident cases.

In July 2003 Colorado changed from a no-fault auto insurance system to a fault-based system. Ever since this change there has been a great deal of debate about the amount of damages that can be recovered for medical bills resulting from a car accident. As is often the case, the insurance industry has taken a very different position on this issue than personal injury lawyers who help innocent persons injured in a car accident. Experienced personal injury lawyers who work on auto accident cases believe that the full amount of medical bills incurred should be recoverable as damages. After all, these medical expenses would not have been incurred but for the carelessness of another driver.

In contrast, insurance companies take the view that they should only have to pay the part of the medical bills actually paid by an injured person’s health insurance. They claim that if they are required to pay any more than that, the injured person gets an unfair “windfall” in compensation for damages that he or she did not have to pay.

An example may help make this issue clearer. Suppose you were seriously injured in a car accident by a driver who crashed into the rear-end of your vehicle while you were stopped at a red light. And suppose the medical bills for your injuries amounted to $30,000.00. Because you had health insurance, your health insurance paid for your medical bills. However, your health insurance only had to pay two-thirds of the actual medical bills, or $20,000.00. How much are you entitled to recover for medical damages from the negligent driver: the $30,000.00 in medical expenses billed, or the $20,000.00 in medical expenses paid by your health insurance company?

Until recently the answer was unclear because there was no case law decisions from Colorado’s appellate courts. Most of our trial courts held that you are entitled to recover the entire $30,000.00 in medical bills caused by the car accident. The reasoning is that the negligent driver who injured you should not get the benefit of insurance coverage that you obtained and paid for. If there is a “windfall,” it should be received by the person who paid for the health insurance – not the negligent driver who caused the injuries and necessitated the medical bills. Some of our trial courts, however, held that you can only recover the portion of your medical bills actually paid by your health insurance company.

Finally, the issue has been addressed by an Appellate Court in Colorado. On August 28, 2008, the Colorado Court of Appeals decision in Steidinger v Hilton was issued. In that case Steidinger was a passenger in a car driven by Hilton. As a result of Hilton’s careless and negligent driving, Steidinger was seriously injured and incurred $53,000.00 in medical bills. Steidinger had medical insurance that paid off his bills for the reduced amount of $25,000.00. At trial the question was whether Steidinger should recover $53,000.00 in medical damages, or only $25,000.00 (the amount paid by his health insurance). The trial court ruled that Steidinger was entitled to recover the full amount of his medical bills, $53,000.00. The jury verdict gave that amount to Steidinger. Hilton and his insurance company appealed claiming that the verdict was excessive and resulted in an unfair “windfall” to Steidinger. The Court of Appeals disagreed with them. Relying on a Colorado Statute, the Court found that Steidinger was entitled by law to recover the full amount of his medical bills – not just the reduced amount that was paid by his health insurance.

This case is important because it is the first appellate decision addressing this issue, which comes up in nearly every car accident injury case since the no-fault insurance system in Colorado ended in 2003.

Strangely, the Court of Appeals decision in Steidinger v.Hilton was released as a “non published” decision. This means that it will not appear in the official law books. That is unfortunate because it is the only appellate court decision in Colorado to give guidance to the trial courts on a critical issue that keeps coming up in nearly all auto accident personal injury cases.

Please contact us with any questions you may have at 719.471.3848. You can also email us HERE with your inquiry or questions. Our website can be found at www.GaddisKinHerd.com.