Your State Government at Work

New legislation this year favorable to injury victims:

-Public Act 98-548 requires Defendants to timely perform settlement agreements. 735 ILCS § 5/2-2301. Nothing makes my clients more upset than finally agreeing to a settlement after contentious litigation, only to learn that the Defendants are dragging their feet to delay payment. This bill sets deadlines and creates financial consequences if those deadlines are not met.

-Public Act 98-519 raises minimum automobile liability insurance limits from $20,000 per person/$40,000 per occurrence to $25,000 per person/$50,000 per occurrence, effective January 1, 2015. Despite decades of dramatically rising medical costs, these limits had not been increased in 24 years since the Illinois General Assembly first required motorists to carry liability insurance in 1989. These modifications are a small step towards helping injury victims recover from the financial shock of life’s catastrophes and will have a negligible impact on consumer premiums.

Explaining Automobile Insurance: Part III – Medical Payments Coverage

In addition to liability and UM/UIM coverage, insurance companies often offer what’s called medical payments insurance. This coverage is very self-explanatory on its face, but tricky in its application. Medical payments coverage typically provides money to pay for medical bills incurred as a result of a motor vehicle collision regardless of who is at fault. That means that even if you are 100% at fault – you run into a tree because you were too busy texting – your insurance company will still provide money to help with your medical bills. A common limitation is that the medical bills must be 1) incurred within one year from the date of the collision and 2) reported to the insurance company within that same time period. Also, these benefits are only payable up to the limits you purchase. If you purchase $5,000 in “med pay” coverage, your insurance company will only pay the first $5,000 of your medical bills.

$5,000 in “med pay” coverage may seem like a lot, but it’s not. Even a short ambulance ride to a local emergency room typically costs around $750.00. Once you’re in the emergency room, note that the hospital and most of the doctors who see you will bill separately. The emergency room physician will probably bill around $500.00 to oversee your care. Radiologists who you never even see, but who interpret your x-rays and CT scans and report their findings to the emergency room physician will bill another $250.00. In addition to a standard charge for the hospital room, the hospital will bill for each medication dispensed and x-ray ($200-500 per scan) or CT scan ($1,500-2,500 per scan) undergone. While prices vary widely between various hospitals and based on the extensiveness of your treatment, one thing remains constant: before you know it, that $5,000 in medical payments insurance is gone.

So how do you get the most out of your medical payments coverage? The most important thing is to also have health insurance, whether private or government-funded (Medicare and Medicaid). Thanks to ObamaCare, starting January 1, 2014, the federal government will be incentivizing you to make a smart financial decision by purchasing health insurance (or paying a penalty for failing to do so). One of the many reasons that health insurance is so important to have is that your health insurance company acts as your agent in bargaining with your medical providers. When presented with the exact bills discussed in the previous paragraph, your health insurance will pay them for a fraction of the full bill. You can then use your medical payments coverage to pay any deductible or co-payment required in your health insurance plan. In contrast, if you just use your medical payments coverage to satisfy your medical bills, you will end up paying the full medical bill.

Health insurance companies typically enter into contracts with hospitals and doctors providing for a set fee schedule for each service you receive. The prices in these contracts are often well below the listed price which your medical provider will bill you. Automobile insurance companies don’t have these contracts with hospitals, so they must pay the full medical bill. By submitting your bills through your health insurance plan first, before using your medical payments coverage, you gain the benefit of the bargain.

For example, if you use your medical payments coverage to pay for the CT scan above, you will end up paying the full $1,500 – $2,500 charge, as if you were paying cash for the bill. However, if you first submit the bill to your health insurance, they may already have a contract in place where that same service is billed at $675. Even if you have a large deductible with your health insurance plan and end up paying $675 out of pocket for that charge, you can use your medical payments coverage to reimburse you that $675 charge. That way, you’ve only used $675 of your med pay benefits rather than $2,500. If you need follow up treatment, you now have $4,325 in med pay benefits left rather than only $2,500. Also, as you have to typically have to repay any insurance benefits you receive (whether from health insurance or med pay insurance) out of any settlement you receive from the at-fault driver’s insurance company, it’s in your interest to keep the amounts these providers pay out to satisfy your medical bills as low as possible. Submitting your medical bills to your health insurance first and then using your med pay benefits to reimburse yourself for deductibles and co-payments is the best way to keep repayment of your medical bills as low as possible.

Unfortunately, the medical industry is well aware of which insurance company will pay them what for each service, and may often tell you that “I’m sorry, we only take automobile insurance – We don’t take Blue Cross”, unless of course there’s no automobile insurance available, in which case they’ll gladly take Blue Cross. You may have to put up a stiff resistance to force the medical billers to take the insurance plan you want them to take, because they would much rather receive the full $1,500 to $2,500 than the $600 in the example above. However, it’s worth the struggle, as the wise allocation of your insurance benefits can play a very large role in your net recovery from any personal injury case.

Explaining Automobile Insurance: Part II – Underinsured and Uninsured Motorist Coverage

Underinsured Motorist Coverage: As the examples in my previous post demonstrate, in light of the high cost of healthcare today in Chicago, it is very easy for the value of personal injury cases to exceed the state minimum liability limits of $20,000. So what happens if you suffer personal injuries and the at-fault party did not purchase sufficient insurance?

In this scenario, insurance companies offer what’s called “underinsured motorist coverage” (“UIM”). UIM insurance is coverage that you can purchase to fill the void left when someone who did not purchase sufficient insurance ends up injuring you. It happens more often than you realize. Just look around next time you’re driving and see how many cars you see that are 10+ years old. To illustrate this scenario, imagine someone rear ends you, and your medical bills total $60,000, but the at-fault driver only bought a state minimum “keep you legal for less” insurance policy with only $20,000 in liability coverage. The at fault driver’s insurance company is only obligated to pay the first $20,000 to settle your case, leaving you responsible for the next $40,000 in medical bills. However, had you purchased $100,000 in underinsured motorist coverage when purchasing your own automobile insurance, you could then make a claim against your own insurance company for the $80,000 difference between your underinsured motorist limits and the $20,000 offered by the at fault insurance company. Purchasing underinsured motorist coverage is the only way to protect yourself from the harsh economic realities of the world we all live in. Also, compared to liability insurance, underinsured motorist coverage is relatively cheap.

Uninsured Motorist Coverage: What if the person that hit you had no insurance at all? This is an unfortunate fact of life as well. Often times, when someone has been involved in multiple poor driving events, insurance companies will refuse to insure that person any longer. Also, people lose their jobs and see their auto insurance premium as something they can cut back on. Or people simply lose their bills and forget to pay on time. Also, what if the person that hit you just immediately flees the scene, leaving you no opportunity to even ask if they are insured? In these instances, insurance companies offer what’s called “uninsured motorist coverage” (“UM”). UM insurance is coverage that you can purchase to fill the void left when someone injures you but either leaves the scene (“hit and run”) or stays, but does not have valid insurance. If you are injured and you had previously purchased uninsured motorist coverage, you then can make a claim with your own insurance company, who will pay out on your claim up to the limits of the uninsured motorist coverage you buy. Similar to underinsured motorist coverage, uninsured motorist coverage is often relatively cheap.

As one of the first people to speak with someone following life’s tragic events, it is my extreme displeasure to often have to inform people that while they’ve suffered greatly, sometimes in a life-altering manner, the person who inflicted this suffering on them won’t be able to help make them whole again. I then investigate whether or not they protected themselves from this scenario with un- or underinsured motorist coverage. Every once in a while, people in this situation don’t, and it’s the worst part of my job to tell them that their only option is bankruptcy. Do yourself a favor and make sure that you are not just purchasing automobile insurance sufficient to protect the people you might hurt from financial disaster, but also looking out for yourself.

Explaining Automobile Insurance: Part I – Liability Coverage

I am never surprised to meet someone who does not fully understand their car insurance policy. Frankly, I didn’t understand my own until I became a plaintiff’s personal injury attorney. However, in order to make smart financial and consumer decisions as well as protect yourself and your loved ones in the event of disaster, it is important that you understand these complex insurance contracts.

“Bodily Injury / Liability”: When you purchase car insurance, you are always purchasing, at a minimum, “bodily injury / liability” insurance coverage. Illinois law requires that drivers carry a minimum of $20,000 per person/$40,000 per occurrence in liability insurance coverage. (625 ILCS § 5/7-203) This coverage protects you in the event you are at fault for a collision and you cause someone injury. Not only are you purchasing a right of “defense”, meaning your insurance company will retain an attorney to defend you, you are also purchasing a right of “indemnification”, meaning it will also pay out any settlement or judgment, up to the per person/per occurrence limit you purchased. By purchasing this coverage, you are protecting yourself and the wealth you have built up over your lifetime against a lawsuit should you negligently injure someone.

“Per Person / Per Occurrence”: When you purchase bodily injury / liability insurance, it is most always sold in “$X per person / $Y per occurrence” bundles. The “per person” limit means that if you are at fault and injure only one person, your insurance company will pay any settlement or verdict up to the maximum of the “per person” limit. However, should you be at fault and injure multiple people, your insurance company will pay settlements or verdicts for all of the victims collectively only up to the “per occurrence” limit. For example, if you purchase a state-minimum “20/40 policy” and rear end a car with only one person in it, and his or her damages total $25,000, your insurance company will pay up to $20,000 to settle your case, or the first $20,000 of any judgment against you. However, should you rear end a car with three people in it, and they suffer damages of $25,000 each, your insurance company will only pay up to $40,000 total to settle all three cases, or the first $40,000 of any judgments against you, rather than $20,000 per case or $60,000 total.

How much bodily injury / liability insurance should you purchase? You should always have more insurance coverage than your net wealth. If you do not, you run the risk that someone you might negligently injure could refuse to accept a settlement for the limits of your insurance policy and proceed against your personal assets. Add up the value of the things you own: your house, your car, your savings, etc. Consider how often you drive, and how congested the area you drive in is. Are you putting yourself, and the fruits of years of your hard work at risk? Don’t let a small problem become a life-changing problem because you failed to protect yourself ahead of time.

Thank You!

There have been a lot of people congratulating me on starting my new business lately, sometimes even embarrassingly from judges in the middle of court. I’m grateful for every person who has helped me along the way – other lawyers who have helped teach me my trade or referred me cases, clients who have trusted me despite my youthful appearance, my family and friends, who provide invaluable support, and my late father, who left me the capital to make it all happen. I look forward to living up to all of your expectations.


Welcome to the Spencer Law Offices new blog page. Spencer Law Offices, P.C. represents victims of serious personal injury, wrongful death and medical malpractice in the pursuit of justice. The firm practices law in Illinois and southeastern Wisconsin. All of the firm’s clients come from personal recommendations.