Woman taking photo of the crashed vehicles

Types of Lien Holders That May Affect Your Car Accident Settlement Amount

Even if you are a careful driver or pedestrian, this will not completely negate your risk of a car accident. When involved in an accident, getting compensation goes a long way in easing the burdens of medical and recovery expenses, loss of income, and other issues connected to the crash. Most people, however, give up on this pursuit once they learn of people who got compensated but received little to no money from the overall amount of their compensation.

These people are often those who chose to forego the services of an auto accident lawyer in Salt Lake City. They did not understand the impact of one key element of their final compensation payout; liens. A lien is at times called a security interest and gives someone else a right to claim a portion of your accident’s settlement.

Here are the common lien holders that will affect your final compensation amount:

Health Care Providers

When you are wounded in a car crash, a clinic, hospital, or doctor might require you to sign a LOP (letter of protection) before your treatment. This states that the healthcare provider will be paid from a portion of the money you get as compensation for your accident. Alternatively, health care providers can exercise their rights to take part of your settlement under your state’s lien laws.

Failure to pay the medical bills using your settlement attracts a lawsuit from your healthcare provider, which will be quite expensive. This is because you will reimburse your medical costs, as well as pay the health care provider’s attorneys’ and court expenses.

Private Health Insurers

If your health insurer paid a part of your medical expenses, then part of your settlement will reimburse them. Though the policies differ among insurers, the insurance company has a right to recover what they have paid for your treatment from your settlement. This ensures that you do not get ‘paid twice’ for the same medical expenses.

Car Insurers

Man contacting insurance agentYour car insurer is obliged to provide assistance in case you are involved in an accident. Most policies will cover medical expenses, loss of income, car repairs, or a replacement to a particular limit. The insurer will also collect what they have spent following the accident from the payout. In the past, liens were not placed for underinsured/insured motorist and personal injury protection coverage, but this has changed in most states.

Medicare and Medicaid

Under these plans, you assign the rights to pay for medical care to your state. Under the policies, the state will statutorily be paid from the compensation of your case for all the payments made by the policy related to your injury. The process of reimbursing the medical expenses to Medicaid or Medicare is handled by the CMS, and these liens take precedence over others after your settlement.

Liens are among the most complicated issues to handle in car accident compensation. They will also take a long time and attract various costs if you do not understand what is happening. Having a lawyer handle your case right from the start will significantly minimize the impact of the above lien holders on your compensation.

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