I was in a motorcycle accident. My health insurance paid for my medical bills and my auto insurance paid me a settlement for my pain and suffering. Now my health insurance company is trying to collect money from my settlement. Is this legal? The claims adjuster for my auto insurance stated that the settlement was not taxable and that no other party had any legal right to the settlement. Is this correct? If so, what statute provides guidance in this situation? I am in the Commonwealth of Virginia.
1 Answer from Attorneys
Irrespective of what this claims adjuster may have told you, this issue likely depends upon the specific language in the settlement agreement itself whereby
you assume responsibility for indemnifying, i.e., reimbursing (or not) from the settlement funds any third party claimants such as your health insurer and that your auto insurer is henceforth forever held harmless (released) from having any responsibility for paying such claims.
This issue most likely turns on what the parties have agreed to rather than
any particular state statute.
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