Woman Calling Insurance Company After the Car Collision

Advance Auto Insurance Payments in Montana

Gerstner Adam Law Aug. 16, 2023

In most states, a person injured in an auto accident typically will not receive any compensation from the at-fault driver’s insurance company until the final settlement of the personal injury (PI) claim. However, Montana law offers a unique provision that requires insurance companies to make some advance payment before a PI settlement for certain expenses incurred by the victim.   

The alternative to advance auto insurance payments in Montana is to rush the settlement of a claim, even before you may know the full extent of your injuries or what your maximum medical improvement from them will be. That will leave you shortchanged.   

Gerstner Adam Law helps injury victims in Billings, Miles City, Sidney, and Glendive, Montana, obtain advance payments to provide financial relief without sacrificing the value of their claims. Our team has the knowledge, experience, and resources to assist you while keeping your best interests in mind. 

What Is an Advance Auto Insurance Payment in Montana? 

You only have one chance at settlement, and depending on the circumstances, you don’t want to settle your auto accident claim until you’re almost certain that future damages won’t pop up. For that reason, we sometimes wait months before discussing a settlement. During those months before settlement, what happens to your mounting medical bills or lost wages? Your medical providers typically don’t want to wait to receive payment. In addition to potentially thousands of dollars in unexpected medical debt, you may be out of work for a while and losing out on income that you were planning on receiving.

Luckily for Montanans, we have laws that require insurance companies to make certain payments in advance of a final settlement in certain circumstances. The Unfair Trade Practices Act (“UTPA”) helps govern the relationship between car insurance companies and injured victims. Relevant here, the UTPA requires insurers to act in “good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.” In addition, insurance companies cannot deny prompt settlement of one portion of an insurance claim to “influence settlements under other portions of the insurance policy coverage.”    

In 1997, the Montana Supreme Court decided the seminal case Ridley v. Guaranty Nat'l Ins. Co. In Ridley, the Court determined that the above-quoted portions of the UTPA require an insurance company providing liability coverage to pay the injured person’s medical expenses prior to final settlement if liability is reasonably clear. In other words, if it’s reasonably clear that an insured driver caused a car accident, the driver’s insurance company can be forced to pay the injured person’s medical bills as they are accrued. Receiving an advance payment does not impact the ability to later enter into a final settlement for other damages. Moreover, the Montana Supreme Court clarified in Dubray v. Farmers Ins. Exch. that insurance companies must also advance lost wages incurred as a result of an auto accident if liability is reasonably clear and regardless of whether the victim might bear comparative fault.   

This aspect of Montana law is unique in the country. Advance payments for medical bills and lost wages can help protect injured parties from financial ruin while waiting for a final settlement. 

When Should I File an Advance Auto Insurance Payment Claim? 

Hiring a personal injury attorney is smart for many reasons, but filing a claim for advance auto insurance payments can be tricky. Your attorney may need to document evidence of negligence to clearly establish fault. Then, your attorney will need to determine whether you are eligible for advance payment. Every case is unique, and not all victims qualify. 

As soon as the insurance company agrees to a finding of reasonable fault on its insured’s part and you have accrued medical bills and/or lost wages, it will be time for your attorney to submit a demand for advance payments under Ridley. 

How Will I Receive Advance Payments? 

Your demand letter will be accompanied by copies of the medical bills and lost wages documentation you have incurred to date. The insurer should pay you for those as long as they are directly related to the subject accident and claim. You will continue to submit bills for payment as long as you incur them.   

Will Having an Attorney Help? 

Obtaining advance payments can be challenging. Insurance companies try to find ways to avoid paying claims. You need to hire an attorney who has successfully garnered advance payments for clients before. Once you hire one, you no longer have to work with the insurance company. Your attorney will.   

Remember also that insurance companies have attorneys. You should as well. At Gerstner Adam Law in Billings, Montana, we use the law on behalf of our clients to hold insurance companies to operate in good faith.   

If you have been injured in an auto accident where someone else was at fault and you’re like Paul, drowning in medical bills and other expenses, Gerstner Adam Law can help. All you need to do is call our office now.