Changes to the Law Benefit Insurance Companies at the Expense of Injured People

 The North Carolina legislature recently ended its “long-session” on June 24th. Notable among the legislation enacted was House Bill 542 entitled “AN ACT TO PROVIDE TORT REFORM FOR NORTH CAROLINA CITIZENS AND BUSINESSES,” which dramatically changed the legal landscape for injured people, and provides a windfall for negligent drivers and their insurance companies.

It has always been the law that injured people were entitled to recover the amount of their medical bills, even though their health insurance may resolve those bills less than the amount billed. The logic for this rule was sound: Neither a negligent person nor his or her liability carrier should be allowed to benefit from health insurance paid for by an injured party. Indeed, insurance company lawyers weren’t even allowed to mention to a jury that an injured driver had health insurance. So, for example, if an injured driver incurred $5,000.00 in medical bills as a result of the negligence of another driver, and his or her health insurance resolved those bills for $3,000.00, the amount of medical bills presented to the jury would be $5,000.00 because the law did not allow a negligent driver to benefit from the foresight and sound judgment of another who obtained health insurance through an employer or by purchasing it themselves.

HB 542, however, dramatically changes the law by providing that only the amount actually paid to satisfy medical bills is admissible to prove an injured person’s medical expenses. Using the same example above, the amount of medical bills that could be presented to a jury would be only $3000.00, not $5000.00, allowing the negligent driver and his or her insurance company to benefit from an injured driver’s health insurance. Moreover, even if an injured driver’s medical bills have not been paid by his or her health insurance, the insurance company lawyer can still introduce as evidence of the amount of medical expenses that amount actually necessary to satisfy those medical bills.

Allowing negligent drivers and their insurance companies to benefit from an injured person’s medical insurance, which he or she may have paid for out of his or her own pocket, strikes most people as wrong! It also sends a perverse message to would-be careless drivers that the cost of their carelessness will be subsidized by people they injure.

These changes are effective for all cases filed after October 1, 2011.