Your Bodily Injury Claim Settlement: Being Prepared for Liens...

Once you've received your bodily injury claim settlement you're not necessarily entitled to keep all of the money. If you paid all the medical bills out of pocket, the entire amount of your settlement compensation (paid for medical expenses of course) is yours to keep.

If your medical bills were covered by your own personal auto policy or medical health coverage, you may have to repay them with what's called a "Lien." This is a provision that can be written into your own insurance coverage. The same is true for HMOs and Medicare. Basically, they have a right to get their money back if you get a third party bodily injury claim settlement.

This only makes sense. Part of your insurance settlement is paying for the exact amount of your medical bills. Since you didn't pay them, you can't really expect to be compensated for that amount.

If you're in a car accident and your auto coverage pays for your medical bills, they'll probably have you sign off on a future lien. They want to make sure that if you file a third party claim they'll be reimbursed.

So when you finally receive the money from your injury claim settlement, put aside the amount spent on your medical bills. If you haven't been told you'll have to pay a personal injury settlement lien, then feel free to put the money in a savings account to start making some interest.

But don't go spending that money yet, because at any time your auto coverage company might send you a notice. The same is true for other organizations that may have paid your medical bills.

Of course, there are limits as to how long they can wait before contacting you. To be safe, keep the money available for at least six months.

If you still haven't heard anything from them after six months, then look into your state insurance laws. There will be guidelines on how long the insurance company can wait before taking a lien on your bodily injury claim settlement.

You may want to avoid calling the company that paid your bills and asking them about the lien. Why remind them that they still need to request it?