Car accidents themselves do not affect your credit score. However, bills related to your accident can affect credit—and that includes bills you thought your insurance would take care of. Medical bills, in particular, can get sent to collections even if you have health insurance.
But you have the power to stop that from happening. It just means understanding the system and how to enforce your rights.
Below, we’ll cover everything you need to know, including:
- Why medical bills for car accidents get sent to collections and ruin credit scores
- How to use your own health insurance (if any) to prevent that from happening
- How you may be able to put your bills on hold until you get your accident settlement
Why Car Accidents (and Medical Bills) Can Affect Your Credit Score
Most car accident victims have at least some level of physical injury. That could mean being rushed to an emergency room, or it could mean seeing your normal doctor the week after the accident. Either way, those injuries come with medical bills. And those medical bills will often end up in collections—even if you thought they were covered.
Here’s why. Most people have at least some level of health insurance, and your doctor’s office should bill your health insurance after your treatment. But many won’t do that. Many clinics make more money if they get paid from a settlement (at full price) than they do if they bill health insurance (which pays a lower, negotiated price).
So the clinic or hospital may have an incentive to hold off on billing your insurer, and wait for your settlement to come though. And since settlements can take months or longer, they may even refer your bills to collection…. which tanks your credit score.
How to Make Sure Your Doctor’s Office Bills Your Insurance
Technically, your health provider is obligated to bill your insurance if they can. Assuming they accept your particular insurance company (they are “in-network”), there is no legal reason why they should refuse to do so.
Here are steps you can take to make them do their job—and protect your credit score:
- Before you leave after your appointment, confirm with the receptionist that they will bill your health insurance.
- Call the office manager of the clinic or hospital. Ask them to confirm this as well.
- If the office manager refuses because your injury involves a legal case, tell them your health insurance policy does not have an exception for that reason.
- Additionally, you may tell them (quite truthfully) that you cannot be sure whether you will recover a settlement or not. You need the insurance billed immediately.
If all else fails, ask your car accident lawyer to contact the office for you. It’s shocking how quickly someone will change their story once a lawyer is on the job.
Of course, not everyone has health insurance. And even if you do, you may still be stuck paying your deductible and co-pays. If that’s you, read on.
It May Be Possible to Put Your Medical Bills on “Hold”
If you have to pay medical costs out-of-pocket, you don’t have to wait until your settlement comes through, and you definitely don’t need to pay them with credit cards.
Instead, you have two options. Either or both may work for you:
- Ask your lawyer for a “letter of protection.” This is a formal letter to your health care provider stating that you are involved in a legal case to pay for your injuries, and are expecting to recover money. It asks the provider to put a hold on your bill. If your provider agrees, your account will essentially be “on pause” until your case is resolved.
- Your lawyer may be able to help you with the bills themselves. Some law offices will offer to pay your bills for now, expecting the money to be repaid out of the settlement when you get it. Whether they will offer it may depend on the specifics of your case, but it can be a lifesaver.
In a worst-case scenario, the clinic or hospital themselves might be willing to accept smaller monthly payments toward your bill. This can make it easier to keep your account out of collections, and the payments will only be temporary until the settlement comes through.
Remember: everything you pay out of pocket could potentially be repaid by your accident claim.
Don’t Let Your Car Accident Affect Your Credit Score
The best way to get protection from creditors after an accident—and medical bills—is to have an experienced lawyer helping you. Our law group has been helping accident victims for over 20 years. Let us give you a FREE consultation. Call us at (404) 341-6555 or fill out the form to the right to get your FREE consultation today.
