Insurance: Overview

This section includes the following related topics:

  • Compensation for crime victims
  • Medical payment coverage
  • Health insurance coverage
  • Liability insurance coverage

When an accident of any sort happens, one or more insurance policies may provide coverage. The person who caused the accident might have liability coverage, and the victim might have health insurance or might be qualified for government-provided health care or other assistance. All of these sources might be used to pay the losses, partially or entirely, depending on the type of insurance.

Insurance covers accidents and statutory liability

If the incident is not an accident, but was intentional, only the victim’s insurance will provide coverage. Dog bites are 99.9% accidents, so both kinds of insurance are available if the dog owner and the victim have them. Government-provided health care applies to both accidents and intentional injuries.

Government assistance for crime victims

If the dog owner committed a crime related to the dog attack, the victim might qualify for government assistance in some jurisdictions. For example, California has laws that provide for payments to crime victims and has sentencing provisions that require a convicted defendant to give a certain portion of his or her earnings to the victim.

Who insurance covers

Insurance covers the named insured for all the perils mentioned in the policy, except for those that are excluded. Other people might also be covered. For example, the standard homeowner’s policy covers all residents of the household who are related to the named insured, are dependents under the age of 21, or are petsitters who are not being paid. Harm caused by dogs belonging to the named insured and all dependents under the age of 21 is also covered (if coverage is provided for dog-inflicted injuries at all).

Types of policies when a person is accused of responsibility for a dog bite

Dog owners usually are insured against dog bite liability under one of the following types of insurance policies:

HO-3, Homeowner
H0-4, Renters
H0-5, Homeowner (aka HO-3 + 15)
HO-6, Condominium
DP1 or DWG1 or Dwelling 1
DP3 or DWG3 or Dwelling 3

Let’s focus on the homeowner’s policy. It usually has the following coverages:

Coverage A: Dwelling
Coverage B: Other Structures
Coverage C: Personal Property
Coverage D: Loss of Use
Coverage E: Liability
Coverage F: Medical Payments

Not all of the coverages are in play in a dog bite case. The only important ones are Coverage E and Coverage F.

Liability coverage

Liability insurance covers the person or company that is liable for the accident (see Who insurance covers, above). The key concepts here are “liable” and “accident.” This type of insurance does not apply if the defendant is not liable for the accident. To find out who is liable for a dog attack, see Legal Rights of Dog Bite Victims in the USA.

Medical payment coverage

Homeowners’ insurance and renters’ insurance policies cover dog attacks for which the insured persons are legally liable, as well as that require medical attention, regardless of liability. The claim for reimbursement of the victim’s medical bills is made under Coverage F: Medical Payments. The advantage to making a claim under this part of the insurance policy is that the insurance company will quickly pay it after receiving sufficient evidence of medical bills incurred as a result of the accident, assuming, of course, that the accident is covered by the policy. Proof of liability is not required. However, the amount that the insurance company will pay is quite limited, ranging usually from $1,000.00 to $5,000.00 per claim. 

One of the responsibilities of your attorney is to collect all available funds and pay off any medical claims. This should be done by making a claim under the medical payment coverage early in the claims resolution process.

It is important to note that the medical payment policy limit is not the total amount of money available for medical treatment costs in a dog bite case. It is only a preliminary claim for limited benefits. When the complete claim is presented, it will include a demand for all past and future medical expenses, which will be covered by the liability provision of the insurance policy, with much higher limits.

A common mistake: sending medical bills directly to the dog owner’s insurance company

It is a common mistake to send the victim’s medical bills directly to the dog owner’s insurance company. While the insurance company is obligated to pay medical expenses under the medical payments coverage (if any), there are reasons why the victim’s attorney should be the one who sends the bills to the insurance company:

  • The medical payment claim has to be made formally, by an attorney, to ensure that anything at all is paid.
  • The insurance company will only pay the limit of the medical payment coverage, which might be $1,000.00 to $5,000.00. Therefore the insurance proceeds have to be strategically applied against only the most important and pressing medical bills.
  • The attorney is in the best position to determine which medical bills are the most important and pressing. For example, an upcoming surgery might require a surgical suite fee paid in advance, which the victim might not be able to afford. That kind of bill is important and pressing. An experienced attorney will be able to prioritize competing claims to the limited amount of medical payment proceeds.
  • The attorney may be able to convince certain healthcare providers to refrain from collection proceedings until settlement money (or money from a judgment) is available. This is referred to as a “lien,” meaning that the provider has a legal right to be paid from the funds that later come into the attorney’s hands from the injury claim.

The people who work at doctors’ offices are not actually authorized to send claims to the insurance company for the liable party in an injury case — believe it or not. Therefore, the claims are on the wrong forms (there really are no forms for this, because attorneys handle them differently each time), the insurance company gets confused and sends confusing letters to the doctors’ offices, and the medical payment coverage limit is exceeded. As a result, less than all providers are paid. Sometimes, the doctors feel that the victim has misled them by giving them incorrect insurance information, and the quality of care can actually suffer.

Property damage coverage

The dog owner’s insurance policy might provide not only liability payments but also property damage coverage for the victim’s torn clothing, broken glasses, etc. Like the medical payments coverage, this is a separate and distinct policy provision, with its own limit. A standard limit is $500.00.

Health insurance

The victim might have some kind of health insurance. For example, a child might be covered under a parent’s work policy. There are all kinds of health insurance plans, and many people have them.

The victim often is reluctant to use his or her insurance. One fear is that the insurance company will drop the victim. If the coverage is under a group policy, this is not likely to happen. If the victim was not responsible for the dog attack, it also is not likely to happen.

Any time a claim is made, whether against the dog owner’s policy or the victim’s policy, a record of it is kept in a national registry that the insurance industry maintains for the purpose of fraud prevention. Therefore, the victim’s insurance company can find out about the attack at any time, so failing to make a claim will not keep it secret.

Attorney Kenneth M. Phillips usually advises clients to use their own insurance because some health providers, especially hospitals and ambulance companies, refuse to wait for the settlement or judgment, use bill collectors to harass the victim, and send negative reports to credit reporting agencies. These companies do not consider themselves bound by the ethical precepts of physicians, who take an oath to render medical assistance whenever necessary, even to people who cannot pay, and who, therefore, routinely enter into arrangements to be paid after the settlement or judgment. The practices of such companies are unfair and unwarranted and should be made illegal someday.

A great article about obtaining health insurance benefits for reconstructive surgery can be found on the website of Medem, entitled Insurance Coverage: A Patient’s Guide.

Strategy for paying medical bills

You can deal in several different ways with creditors like doctors, ambulance companies, and hospitals. The first choice is to ask them to “accept insurance.” This means that they will take as full payment whatever your health insurance company will pay them.

Beware of something called “full balance billing.” This is best illustrated with an example. If the creditor has an agreement with health insurance companies like Blue Shield or Blue Cross, that agreement says that the provider can charge you CERTAIN LIMITED AMOUNTS for services. In other words, the regular price might be $4,000.00, but the agreement might say that you get it for $400.00 (which is an example of something that really happened in a different case). Some providers take the position that, even though they agreed with the health insurer to take only the $400.00, they can turn around and bill you for the difference. In the view of many, that is INCORRECT and unfair. Do not agree to pay the full balance. Keep in mind that one of the services that an attorney will provide is the negotiation of such bills.

The second choice is to ask them to “take a lien” on the “case.” This means that they will agree to not press you for money until the case or claim settles, at which time they will be paid through the settlement. The advantage is that you do not have to come up with the money now (which, in any event, would be repaid to you out of the settlement). The other advantage is that you or your attorney would have a chance to negotiate (i.e., reduce) their bill. If they agree to this, they will provide you with a form to sign, which you should permit your attorney to review before you actually sign it. If the provider does not have the form, tell them to call your attorney, who will send a form to them.

The third choice is to pay the amount (either the amount that they ask for or an amount that you negotiate) and get reimbursed from the settlement.

If you fail to do any of these things, the likely outcome will be that the matter will be turned over to collection. However, there have been cases where the provider “writes off” the balance (i.e., reduces it to zero).

Insurance companies don’t sue their policyholders

Insurance is something you buy to put the risk of a loss on the insurance company. When you buy insurance, you are saying, “I think there’s going to be a loss that I’m responsible for, so I’d like to pay someone to take care of it if it happens.” If there is a loss, you win your bet, and they take care of it; if there isn’t, they win by keeping your premiums. 

The system is set up so that the insurance companies still make a profit even though they are paying losses, like an injured child’s medical costs. So, insurers do not have to sue their policyholders for anything, ever. And if they did, it would defeat the purpose, and nobody would waste their money on insurance anymore.