What Is a Letter of Protection in Texas? How It Pays for Medical Care After an Accident

Legally reviewed by Alexander Begum, Personal Injury Attorney

Key Takeaways

• A letter of protection in Texas is a payment promise, not insurance. Your lawyer tells a provider it will be paid from your settlement or verdict, so you can be treated now.
• No Texas statute regulates letters of protection. Each one is a private agreement, and its wording decides what you owe. A 2025 bill to regulate them (SB 30) did not pass.
• You usually still owe the bill if the case is lost or settles low. An LOP delays payment; it rarely erases the debt.
• Texas limits medical damages to what was “actually paid or incurred.” Under Civ. Prac. & Rem. Code §41.0105, that is the amount the provider has a legal right to be paid.
• The defense can dig into LOP bills. The Texas Supreme Court held in 2021 that a provider’s negotiated insurer rates are relevant and discoverable.
• Hospitals have a separate lien right. A hospital that admits you within 72 hours of an accident can claim a lien of up to 50% of your recovery.

A letter of protection is a written promise, usually from your personal injury lawyer, that a doctor, clinic or surgery center will be paid from your settlement or court award instead of up front. It lets you get treated after a crash when you have no health insurance or a provider will not bill your plan, but Texas has no statute governing these letters, so the agreement itself controls what you owe and when.

An LOP can bridge the gap until your claim pays, or it can shrink your net recovery and leave you with a large balance. If you were hurt in a wreck, our Texas car accident lawyers can walk you through your options at no cost.

What Is the Purpose of a Letter of Protection?

The purpose is to get you care now and let the provider wait until your claim resolves, because the at-fault driver’s insurer pays once, at settlement or after a verdict, not as you go. People most often need one when:

• They have no health insurance, or the deductible puts care out of reach.
• A surgeon or imaging center they need does not take their health plan.
• They need ongoing care, such as therapy, injections or surgery, that will cost far more than the $2,500 of PIP many Texas policies carry.

Skipping care is worse: adjusters use treatment gaps to call an injury minor (see if you didn’t go to the doctor after a crash).

How Does a Letter of Protection Work in Texas?

1. You hire a personal injury lawyer and need treatment you cannot pay for up front.
2. Your lawyer sends the provider a letter stating its charges will be paid from any settlement or judgment. You may be asked to sign it, or a separate agreement, too.
3. The provider treats you and records the charges instead of collecting them.
4. The provider bills your lawyer. Since a 2025 amendment, a provider treating a represented injury patient may meet its Texas billing deadline by sending the bill to the lawyer within about 11 months (Civ. Prac. & Rem. Code §146.002(c-1)).
5. When the case resolves, the provider is paid from the settlement funds under the letter’s terms, often after your lawyer negotiates the balance down.

Is a Letter of Protection Legally Binding in Texas?

Yes, as a contract, but no Texas statute defines or regulates it. Neither the medical-expense evidence rules in Civil Practice and Remedies Code ch. 18 nor the damages rules in ch. 41 mention letters of protection. In 2025 the Legislature considered Senate Bill 30, which would have defined the term and changed how medical expenses are proven at trial. The bill history on Texas Legislature Online shows it went to a conference committee on May 30, 2025, and never became law.

So the wording matters. Some letters only commit settlement funds that actually come in; others carry your signature and make you personally liable for the full charges. Keep a copy of anything you sign.

Do You Still Owe the Bill If You Lose Your Case?

In most cases, yes. A letter of protection postpones payment; it does not cancel the debt. If your claim is denied, you lose at trial, or the settlement cannot cover every bill, the provider can generally seek the balance from you under the agreement.

So your lawyer should size up the liability case and available insurance first. Texas only requires drivers to carry $30,000 in bodily injury coverage per person (Transportation Code §601.072), and one surgery billed under an LOP can exceed that. If the other driver had no insurance, your own uninsured motorist coverage may matter more, as we explain in what happens if you wreck with someone who doesn’t have insurance.

Letter of Protection vs. Other Ways to Pay Your Medical Bills

An LOP is one of several ways treatment gets paid after a Texas accident. In most cases it should come after the others.

Sources: Texas Insurance Code §§1952.152-.156; Civil Practice and Remedies Code ch. 140; Property Code ch. 55; Transportation Code §601.072.

PIP is the fastest money: it is payable without regard to fault (Insurance Code §1952.155), and a late-paying insurer owes a 12% penalty plus attorney’s fees (§1952.157). If your health plan wants reimbursement, Civil Practice and Remedies Code §140.005 limits most insured plans to no more than half of your recovery, after a share of attorney’s fees and costs. That chapter does not cover Medicare, Medicaid, workers’ compensation or self-funded ERISA plans (§140.002(f)), which have their own rules.

How Texas Courts Treat Medical Bills Under a Letter of Protection

The “paid or incurred” rule

Section 41.0105 limits recovery of medical expenses “to the amount actually paid or incurred by or on behalf of the claimant.” In Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011), the Texas Supreme Court held that this means expenses “that the provider has a legal right to be paid” (Supreme Court of Texas opinions, FY2011). When a health plan pays, the discounted amount counts. Under an LOP there is often no discount, so the full charge may be what you owe, and that is the number the defense will attack as unreasonable.

Affidavits and counteraffidavits

Charges can be proven reasonable and necessary by a provider’s sworn affidavit, and the defense can dispute them with a counteraffidavit, under strict deadlines (§18.001).

Discovery of the provider’s rates

In In re K & L Auto Crushers, LLC, 627 S.W.3d 239 (Tex. 2021), the Texas Supreme Court held that a provider’s negotiated rates with insurers and public payers are relevant to whether its charges to an injured patient are reasonable, and that narrowly tailored requests for them are discoverable. Applying that ruling in In re ExxonMobil Corp., No. 20-0849, the Court noted that providers holding letters of protection have a financial interest in the case. In practice, your LOP provider can be subpoenaed, and a bill far above what it accepts from insurers can hurt you with a jury.

What Is the Difference Between a Letter of Protection and a Hospital Lien?

A letter of protection is a contract. A hospital lien is a right Texas law gives hospitals whether you agree or not. Under Property Code §55.002, a hospital has a lien on your injury claim if you were admitted within 72 hours of an accident caused by someone else’s negligence.

• The lien is the lesser of the hospital’s charges for the first 100 days, 50% of your recovery, or a jury’s award for that hospital’s services less your share of fees and expenses (§55.004(b)).
• It does not cover charges above a reasonable and regular rate (§55.004(d)).
• The hospital must file notice with the county clerk before settlement money is paid (§55.005).
• A release is not valid unless the lien is paid or the hospital is a party to it (§55.007).

Ambulance providers in counties of 800,000 people or fewer have a similar lien, capped at $1,000 (§55.004(f)). A hospital lien and an LOP can both apply in one case, for example an emergency admission followed by months of clinic care under a letter of protection.

Letters of Protection in Catastrophic and Trucking Injury Cases

LOPs carry the most weight, and the most risk, when injuries are severe. A spinal fusion or months of brain injury rehabilitation can produce enormous bills with future care still to come, and in these catastrophic injury cases the defense is most likely to subpoena providers and argue every LOP charge is inflated.

In an 18-wheeler crash, more insurance is usually available. Federal rules require a for-hire trucking company hauling ordinary freight across state lines in a vehicle rated over 10,000 pounds to carry at least $750,000 in liability coverage (49 C.F.R. §387.9), so a well-documented treatment plan matters even more. Our truck accident lawyers, spinal cord injury lawyers and brain injury lawyers work with your treating doctors to document both the care you have had and the care you will need.

Questions to Ask Before You Sign a Letter of Protection

• Have I used my PIP benefits and checked whether my health plan will pay first?
• Who pays the bill if my case is lost or settles for less than the charges?
• Will the provider accept a reduced amount at settlement, and is that in writing?
• Are this provider’s charges in line with what it accepts from insurers?
• Can I choose my own doctor, or is someone steering me to a specific clinic?

See how bills and liens affect Texas car accident settlements.

Frequently Asked Questions

Hurt in a Texas Crash and Worried About Medical Bills? Get The Giant on Your Side

The treatment choices you make in the first weeks after a crash shape what your case is worth and how much of a settlement you keep. The Law Giant’s personal injury lawyers help injured people line up PIP, health insurance and, when it makes sense, letters of protection, then resolve liens and provider balances at settlement. We represent clients across Texas from offices in Brownsville, San Antonio, Houston and Dallas.

The consultation is free, and you pay no attorney’s fee unless we win. Call (956) 982-1800 or contact us online.

Sources and authorities

• Texas Civil Practice and Remedies Code: §18.001, §41.0105, ch. 140, ch. 146.
• Texas Property Code: ch. 55, hospital and emergency medical services liens.
• Texas Insurance Code: ch. 1952, subch. D, personal injury protection.
• Texas Transportation Code: §601.072.
• Federal Motor Carrier Safety Regulations: 49 C.F.R. §387.9.
• Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011), in the Supreme Court of Texas opinions for fiscal year 2011.
• In re K & L Auto Crushers, LLC, 627 S.W.3d 239 (Tex. 2021), as applied in In re ExxonMobil Corp., No. 20-0849 (Tex. 2021).
• Texas Legislature Online, SB 30 (89th Legislature, Regular Session) bill history.

This article is general information about Texas law, not legal advice, and reading it does not create an attorney-client relationship. Every case depends on its facts; talk to a lawyer about yours. Past results do not guarantee a similar outcome.