Does Auto Insurance Pay for Rehab (From Injuries) After an Accident?

Last Updated on October 31, 2020

Car accidents can be traumatic, and some victims require months or years of treatment. When you are injured in a car accident, does auto insurance pay for rehab? Or do you pay for injuries out of pocket?

Typically, the at-fault driver (or the insurance company of the at-fault driver) is liable for any rehabilitation costs related to the accident. Whether you need physical therapy or other rehabilitation after an accident, car insurance should cover costs up to the limits of your policy.

Today, we’re explaining how auto insurance pays for rehabilitation after a car accident, including situations where auto insurance pays for rehab – and situations where it does not pay for rehab.

The At-Fault Driver is Legally Required to Make You Whole Again

Does Auto Insurance Pay for Rehab After an Accident? If you cause an accident, then you are legally required to cover any damages related to the accident. By law, you must make any other parties ‘whole’ again after your actions.

If you smash into another vehicle at an intersection, for example, and cause $10,000 of damage to that vehicle, then you must pay $10,000 to repair the other driver’s vehicle. If you have insurance, then insurance will cover this cost through your property damage liability insurance.

Similarly, if you hit a pedestrian at a crosswalk, then you are required to make that pedestrian ‘whole’ again after the accident. You must legally cover the medical bills and rehabilitation costs of that person. You must also cover any expenses related to these injuries – like lost wages or pain and suffering. Your car insurance policy covers this out of your bodily injury liability coverage.

How Much Rehabilitation Does Car Insurance Cover?

After an accident, someone might require months or years of physical therapy. Some drivers are never the same and require rehabilitation for life.

In cases where the victim requires extensive rehabilitation, your car insurance will pay up to the limits of your policy. If you have $50,000 of bodily injury liability coverage, for example, then your car insurance will cover up to $50,000 of medical bills and rehabilitation costs.

If the victim requires more than $50,000 of rehabilitation, then you are still liable for these expenses – but insurance will no longer cover it. You have exceeded the limits of your car insurance policy, but there are still damages to be paid. You must still make the victim whole again.

If the victim requires $100,000 of medical care and rehabilitation after an accident, and your car insurance covers $75,000 of that treatment, then you must pay the remaining $25,000 out of pocket.

Types of Rehabilitation Required After an Accident

Even a minor car accident could lead to significant medical bills and rehabilitation costs. Some people require hours of physical therapy after a parking lot fender bender, for example.

‘Rehabilitation’ is a general term for any type of therapy after an accident requires to make the other driver whole again. It could include any of the following therapies:

  • Care by a physician
  • Hospital bills
  • Physical therapy
  • Chiropractic care
  • Speech pathology
  • Occupational therapy
  • Social work
  • Psychological care

Remember: not all damage is physical. Some drivers have emotional pain and suffering after an accident. They may require rehabilitation with psychologists and social workers to make themselves whole again.

How to Claim Rehabilitation Costs After an Accident

For most people, filing an insurance claim for rehabilitation costs after an accident is easy. Just contact your insurance agent to initiate the claim. Tell your insurance company you have been in an accident, that you’re hurt, and that you intend to seek medical treatment.

Your insurance agent should open a claim and assign you a claim number. Typically, they’ll cover initial expenses immediately, then provide final payment at a later date.

Why Rehabilitation Costs Become Complicated

In a perfect situation, you have straightforward medical and rehabilitation expenses. Your insurer agrees to cover all of these expenses, and your rehabilitation costs are within the limits of your policy. Your insurer does not dispute any charges, and you are perfectly whole again after your physical therapy.

Unfortunately, car accident injuries can quickly become complicated.

Some of the things that can complicate a car insurance claim include:

Significant Injuries, Maiming, Disfigurement, and Amputations: Car accidents can change your life. A car accident can leave you with significant injuries. You could lose limbs. You might require lifelong therapy or care. After an accident, car insurance companies may need to put a price on something that’s hard to quantify – like the lifelong cost of rehabilitating someone who lost both legs in a car accident.

Undiscovered Injuries: You might feel fine in the weeks following an accident, then discover serious injuries at a later date. Back and neck injuries may not become apparent for weeks after the accident, for example.

Brain Injuries: Car accidents can lead to serious brain injuries, and brain injuries are complicated. You might require years of therapy or psychological treatment after an accident. How does an insurer quantify the price of a brain injury? After an accident, a car insurance company might need to come up with a specific dollar amount equal to your lifelong psychological rehabilitation costs – and it’s not easy to find that number.

Indefinite Therapy: Some car accidents require just a few weeks of physical therapy before you’re back to 100%. Other car accidents could require months, years, or decades of physical therapy. Some injuries never go away. All of these factors can complicate an auto insurance claim for rehabilitation costs.

Why Coverage Limits Matter

Complicating car insurance rehabilitation coverage even further is the fact that coverage limits exist. Some states require drivers to have just $5,000 of $15,000 of bodily injury liability coverage per person, which might not be enough to cover even a basic injury.

Drivers in California, for example, must have at least $15,000 of bodily injury liability coverage per person and $30,000 of bodily injury liability coverage per accident.

Let’s say a driver crashes into you at an intersection in California. The other driver has minimum liability insurance – the lowest coverage available. Over the 4 weeks following the accident, you amass $65,000 of medical bills and physical therapy costs. Your passengers each required $20,000 of medical treatment after the accident.

In this situation, the other insurance company would pay $15,000 towards your costs (the upper limit of the driver’s policy) and $15,000 towards one of your passenger’s costs (again, the upper limit). The third passenger would receive nothing. You still owe $50,000 of medical bills, while your passengers owe $25,000.

The other driver’s insurance has maxed out coverage. They are not required to pay anything else.

However, the other driver is still required to cover your damage. The other driver is legally required to make you whole again after the accident.

Unfortunately, drivers with minimum liability insurance typically don’t have many assets to seize. Even if you sue the other driver, you may never receive adequate compensation for your accident.

If you are concerned about low coverage limits, consider expanding your liability coverage. Many experts recommend having at least $1 million of umbrella coverage, for example, to avoid losing assets in a lawsuit.

Filing a Lawsuit After an Accident

To recoup rehabilitation costs after an accident, you may need to file a lawsuit against the other driver or the other driver’s insurance company.

By filing a lawsuit, you can reach a settlement with the other driver and the insurance company. You might receive a lump sum today to cover your estimated rehabilitation costs in the future.

Remember: an insurance company’s goal is to pay very little for your claim. Insurance companies don’t want to overspend on a claim. They might challenge your rehabilitation expenses, for example, or offer a disappointingly low settlement.

If you have extensive injuries after a car accident, then the other driver’s insurance company may approach you with a settlement offer. They might offer you, say, $15,000 today to close your case. You might agree to that amount because you only have $10,000 of medical bills – when in reality, you will require $100,000 of physical therapy over the next 2 years.

Ultimately, car accidents can be complicated, and rehabilitation costs can be particularly tricky. If you have a severe accident, a complicated rehabilitation process, or significant injuries, then it may be in your best interest to hire a personal injury lawyer for your car accident rehabilitation expenses.

Final Word on Rehab Costs and Auto Insurance

Car insurance companies pay for rehabilitation costs after an accident. Although an insurance company might challenge certain costs, insurers must make victims whole again after a car accident.

If you caused the accident, then your own insurance company could cover the rehabilitation costs of you, your passengers, and anyone you injure. If the other driver caused the accident, then the other driver’s insurance company would cover rehabilitation costs.

If car accident compensation is getting complicated, or if you’re disappointed by the settlement offered by your insurance company, then consider hiring a personal injury lawyer specializing in car accidents and rehabilitation costs.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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