Back when I was first out of law school, I took a job with a firm that does some insurance defense. One of my first interactions with an insurance company was a conversation I had with an adjuster who was wondering whether she actually had to pay for an injured person’s medical expenses — before the entire claim was settled. The adjuster was incredulous at my answer, and I don’t think that she ever called me again after I told her, “yes, you do.” Maybe she figured that, as a newly-minted lawyer, I didn’t know what I was talking about.
But I did.
And it’s true.
Montana law affords a lot of protection for injured people, and one of those protections is, what we call in the business “Ridley payments”.
Ridley payments are monies an insurance company makes for medical expenses an injured person has from an accident before the claim is settled. These payments are also sometimes called “advance payments.”
These payments are called “Ridley” payments because they are required by the case of Ridley v. Guaranty National Insurance Company. In Ridley, for the first time, the Montana Supreme Court considered whether the Montana Unfair Trade Practices Act requires an at-fault person’s insurance company to pay for the injured person’s actual medical expenses. In the case, the injured person — Ridley — had asked the insurance company to pay for the medical bills he attributed to the accident. The insurance company had admitted that its insured was 90% at fault for the accident. Despite this, the insurance company refused to make payments for the medical expenses Ridley had incurred, so the case went to court.
The Montana Supreme Court reasoned that:
One of the most significant obligations that innocent victims of automobile accidents incur and for which mandatory liability insurance laws were enacted, is the obligation to pay the costs of medical treatment. If the insurer has no obligation to pay those expenses in a timely fashion, even though liability is reasonably clear, then the protection provided by Montana’s mandatory liability laws would be of little value.
Medical expenses from even minor injuries can be devastating to a family of average income. The inability to pay them can damage credit and…sometimes preclude adequate treatment and recovery from the very injuries caused. Just as importantly, the, the financial stress of being unable to pay medical expenses can lead to the ill-advised settlement of other legitimate claims in order to secure a benefit to which an innocent victim of an automobile accident is clearly entitled. We conclude that this is not what was intended by the Montana Legislature when mandatory liability insurance laws and unfair claims practice laws were enacted.
Because of these things, the Court ruled that an insurance company must pay medical expenses before a final settlement is reached if the insured was at-fault for the accident and the injured person’s medical expenses were caused by the accident. Specifically, the Court said:
We hold that the District Court erred when it concluded that the statute in question does not require an insurer to pay an injured third party’s medical expenses until final settlement, even when liability is reasonably clear. We conclude that both subsections (6) and (13) of §33-18-201, MCA, by their terms, impose such an obligation. This does not mean that an insurer is responsible for all medical expenses submitted by an injured plaintiff. Liability must be reasonably clear for the expense that is submitted. That is, even though liability for the accident may be reasonably clear, an insurer may still dispute a medical expense if it is not reasonably clear that the expense is causally related to the accident in question.
Yes, Montana law provides a lot of protection for injured people. But, just because these protections are built into our law does not mean insurance companies always abide by them.
If you’re having trouble with an insurance company, you should contact a Montana attorney to talk about the specifics of your claim.