Credit is an important asset in today’s lending environment. Don’t let an automobile accident ruin your credit when medical, ambulance, hospital and reimbursement bills go unpaid.

Many people who are involved in automobile accidents believe that their medical bills will be paid by the at fault driver as they are incurred. In California that is not true. The insurance company, or the defendant, only have an obligation to pay your medical bills in a total settlement of all losses including future disability, wage loss and pain and suffering. How can you protect yourself?

First, many clients are concerned about using their health insurance, or their health insurance carrier is denying payment. You have the right to have all of your medical bills paid by your health insurance, and if you carry health insurance, make sure that the institutions are properly billing the carriers immediately.

If you have Medicare or Medi-cal, you are also entitled to have health care facilities bill these institutions. Many hospitals will be reluctant to bill for emergency or initial services because Medi-cal and Medicare payments are significantly less than the amount that is billed. However, by insisting that they bill Medicare or Medi-cal, you have a much better chance of protecting your credit.

Look to your automobile medical payments coverage. Your own coverage pays for medical treatment irrespective of fault of the other driver. This underutilized coverage will in many cases provide you with a way pay all or a part of a bill, which preserves your credit.

Hire an attorney. Many medical providers and medical facilities will accept a lien for payment at the end of the case, and not ruin your credit, if an attorney is involved. Attorneys are obligated to pay liens, and therefore, the hospital or medical provider is assured of receiving some type of payment when settlement is reached. Whereas with an individual, hospitals and medical providers are untrusting and unwilling to accept their “word.”

Also do not underestimate the ability to make small payments while your case is pending. Many clients have preserved their credit by making small payments, thus insuring that the bill does not go to collections. This allows medical providers to receive some type of payment periodically while preserving your credit.

An explanatory letter to the medical provider, hospital or ambulance company can also be an effective way in reducing the chance or damaging your credit. While the provider does not need to accept your explanation, it can be the basis of a subsequent follow up with a credit-reporting agency.

If you learn that your credit has been damaged, an explanatory letter to the credit-reporting agency will also assist you in documenting your file with an explanation of the reason for delay. It is not sufficient to explain that you simply could not pay the bill. However, if there was a delay in payment based on some confusion in the billing of the health insurance, medical payments coverage or hospital, or a medical provider error, many times a credit institution will remove the credit ding.

We work with clients to ensure that their credit is maintained and undamaged as much as possible. Contact us if you have concerns about medical bills damaging your credit.


James Ballidis is the managing attorney for Allen, Flatt, Ballidis & Leslie and has been practicing personal injury law for 25 years.