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Advanced Payment of Damages in a Personal Injury Action

Charla Tadlock Apr 19, 2017

In Ridley v. Guarantee National Insurance Company (1997) and Dubray v. Farmers Insurance Exchange (2001), the Montana Supreme Court held that an insurance company must advance pay special damages (economic losses like loss of earnings, property damage and medical expenses) when liability, or fault, is reasonably clear. In other words, the injured person does not have to wait until final settlement, or trial, to receive payment for injury related medical bills and lost wages. Instead, the insurance company must pay those costs as they are incurred.

The Montana Supreme Court confirmed that innocent victims of automobile accidents incur costs for medical treatment and that insurance companies should promptly pay those costs. An insurance company's failure to promptly pay its obligation for medical treatment and lost wages may be bad faith.    

This directive from Ridley and Dubray applies to motor vehicle accidents where it is clear that another party is responsible for causing the accident. However, insurance companies often deny payment of damages arguing that although their insured caused the accident, the accident did not cause the injured person's damages. Frequently, insurance companies argue that  pre-existing medical conditions - not the clear liability accident - caused the need for medical treatment or time lost from work.

Other times, insurance companies only advance pay damages for a limited period of time. At some point, the insurance company denies payment for medical benefits as no longer related to the clear liability accident. This argument is based on often mistaken belief that the injured party should have recovered from the injuries by then.    

The insurance company's failure to pay for medical bills often leads to the injured person not receving desperately needed medical treatment, and/or lost wages, for their injuries, and consequently, not making the best recovery. This can also lead to devastating consequences for the injured person and their family. Please do not allow an insurance company's failure to pay medical bills or wage loss interrupt your life or hinder your recovery.

Insurance companies that deny advance payments for medical bills and lost wages may be violating the Montana Unfair Trade Practices Act and commiting bad faith. Damages in an insurance bad faith claim in Montana include:

  1. Interest calculated from the date on which an insurance company should have paid an insurance claim.
  2. Mental and Emotional Distress.
  3. Punitive damages if the insurer acted with actual malice in its claims handling practice. 

For more information on insurance bad faith claims, please see Murphy Law Firm's Montana Insurance Bad Faith Blog.

If you have been injured in a clear liability accident, do not let the insurance company bully you into taking a cheap settlement or going without medical treatment or lost wages. Know that you have a right to have your damages paid in advance of final resolution. If the insurance company refuses to pay your medical bills or lost wages, please call Murphy Law Firm at (406) 452-2345 or visit us at for a free initial consultation with one of our experienced staff members.

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