We’re all hearing about ‘junk fees’ in banking and air travel, and now that same fight is showing up in auto accident claims, changing the entire game for how we write demand letters and negotiate settlements. Now we have to know exactly what’s a legitimate charge versus what an insurer can label an excessive or hidden fee. So how does this new battlefield affect what our clients can actually get paid?
Key Takeaways
- Insurers are using new ‘junk fee’ definitions to deny certain medical or admin charges, meaning they might not be recoverable in a settlement.
- We have to tear down every medical bill and provider charge line-by-line to find and fight these junk fee arguments, otherwise the claim’s value drops.
- Your demand letter can’t just list costs anymore. It needs a rock-solid justification for every single dollar, especially for anything an insurer could possibly call a junk fee.
- Fighting back against these tactics correctly can stop insurers from lowballing a valid claim and in the end put more money in the client’s pocket.
Case Study 1: The Disputed Administrative Fee in a Rear-End Collision
Here’s a real-world example. We had a case in November 2024 involving Mr. David Chen, a 42-year-old warehouse worker from Fulton County. He got hit from behind in a rear-end collision on I-75 by the 17th Street Bridge, injuring his neck and back with a whiplash and a herniated disc. The driver of the commercial van that hit him admitted he was at fault. Mr. Chen’s treatment started at Grady Memorial and then moved to months of chiro and PT in Midtown Atlanta, with his total medicals hitting $18,500.
The problem started when the insurance company for the van driver, a big national carrier, decided to fight a couple of line items. They pointed to a “records retrieval and administrative processing fee” of $350 from the PT clinic and a “billing submission surcharge” of $125 from the chiropractor and called them ‘junk fees.’ Their argument was that new guidance from the Consumer Financial Protection Bureau (CFPB) on hidden fees meant they didn’t have to pay, so they left it out of the first offer. The kicker is the CFPB doesn’t even regulate PI claims, but insurers are grabbing onto its logic as an excuse to pay less.
Our strategy was to prove these were real, documented costs. We got detailed affidavits from both the physical therapist and the chiropractor explaining exactly what the fees covered, the records fee was for the actual time and postage to assemble the massive record file the insurer demanded, while the billing surcharge was a standard, transparent fee for electronic processing that was listed right on their patient intake forms. We pointed them to O.C.G.A. Section 31-33-2, which covers charges for medical records, showing the fee was legal under Georgia law. We also proved they charged these same fees to all patients, not just our client, which blew up their argument that it was just for litigation.
After we sent them a detailed legal brief and went back and forth a few times, the insurer finally gave in. They conceded their ‘junk fee’ argument was weak in this context. The final settlement for Mr. Chen came in at $65,000, which included the full disputed amounts and covered all his medical bills, three months of lost wages, and his pain and suffering. The whole thing was wrapped up in eight months from the date of the wreck.
Case Study 2: Hospital Liens and Unexpected Facility Charges
In another case, Ms. Emily Rodriguez, a 28-year-old graphic designer from Decatur, got into a bad T-bone wreck at Ponce de Leon and Scott Boulevard back in April 2025. She broke her femur, needed surgery at Emory University Hospital Midtown, and faced a long rehab. Her medical bills shot past $120,000 fast, and the hospital filed a lien for that amount under O.C.G.A. Section 44-14-470. To make things worse, the at-fault driver had no insurance, so we had to go after her own uninsured motorist (UM) policy.
When we were digging through the mountain of hospital bills, we spotted a “trauma activation fee” of $7,500 and a “facility readiness charge” of $2,000. These are common in big trauma hospitals, but they weren’t itemized at all. Predictably, her own UM carrier flagged them as potential ‘junk fees’ that they shouldn’t have to pay. The adjuster’s argument was that without a clear breakdown, they couldn’t be considered reasonable and necessary expenses from the accident.
We immediately hired a medical billing expert to audit the whole file. The expert confirmed what we suspected: trauma activation fees are standard, but to get them paid, you have to show the work. So we went straight to Emory’s billing department and didn’t let up until they gave us a full itemization of the trauma team’s response, how many doctors, how long they were in the trauma bay, what specific equipment was used. This is stuff that never shows up on the initial bill. We also backed it up with data from the American Hospital Association (AHA) showing these fees are customary for the level of care she received.
Faced with our expert’s report and the hospital’s detailed breakdown, the UM carrier had nowhere to go and recognized the charges were legitimate. Ms. Rodriguez settled her case for her full UM policy limits of $150,000, which covered every penny of her medical costs, including the facility charges they initially fought, and also compensated her for her pain, suffering, and lost income. That case took eleven months to resolve.
The lesson here is simple: insurers are attacking any large, non-itemized charge on a hospital bill. If you don’t have a legal team willing to dig in and force the provider to give you the backup detail, that money is going to be written off as a ‘junk fee’ and taken out of your client’s settlement.
Case Study 3: The Ambiguous ‘Convenience Fee’ in a Property Damage Claim
It’s not just personal injury cases. The ‘junk fee’ fight is bleeding over into property damage claims, especially with complicated repairs. Take Mr. Ben Carter, a self-employed carpenter from Sandy Springs. His work truck got smashed in a wreck on Roswell Road in August 2025. He needed that truck to make a living, and the repairs at a specialty shop were extensive. The at-fault driver’s insurance accepted liability from the start.
The total repair estimate was $22,000, but it included two line items the insurer immediately rejected: a “parts procurement convenience fee” of $450 and a “hazardous waste disposal charge” of $150. The adjuster argued the convenience fee was just shop overhead and the waste charge was too high without proof. They cut a check for $21,400 and said that was that.
We attacked this on two fronts. For the parts procurement fee, we got a sworn statement from the shop owner. He explained the fee covered express shipping and the labor hours his guys spent hunting down hard-to-find parts for Mr. Carter’s specific truck model, which was a real issue with the supply chain problems we’re all still dealing with. We showed it wasn’t a standard fee but one applied only when they had to do this extra legwork.
On the hazardous waste charge, we just asked for the receipts. The shop produced an invoice from their waste management company detailing exactly what was disposed of, contaminated fluids, deployed airbags, etc. It showed the cost was right in line with industry standards and local environmental rules. We even referenced the Georgia Department of Natural Resources (GA DNR) guidelines to back it up.
Once we put that documentation in front of the adjuster, they re-issued the payment to cover the full $22,000. We also got Mr. Carter an extra $3,500 for the loss of use of his work truck while it was in the shop. This part of the claim was settled in about two months, getting him back to work quickly. It just goes to show you have to watch every line item, even on the property damage side.
The Evolving Field of ‘Junk Fee’ Scrutiny
The definition of a ‘junk fee’ is a moving target, constantly being updated by consumer watchdogs and, in turn, by insurance adjusters looking for any reason to cut a check for less. A charge that was standard last year, like a “medical records copying fee” that’s a bit over the state max or a “no-show fee” for an appointment missed because of accident-related injuries, might get flagged by an adjuster today.
We have to tell our clients and their doctors that every bill needs to be itemized down to the last band-aid. A bill that just says “services rendered” is an open invitation for an insurer to start slashing line items and calling them unrecoverable. In 2026, this level of detail is a flat-out necessity.
We’re also seeing the Georgia Office of Commissioner of Insurance and Safety Fire (OCI) keeping a close eye on these billing transparency issues. Even though there are no direct PI regulations on ‘junk fees’ yet, insurers are running with the precedent set by federal agencies like the CFPB. Without a lawyer fighting back, clients are going to see legitimate costs get cut from their settlements. We’ve seen firsthand that adjusters are getting particularly aggressive with any fee that doesn’t have a clear, one-to-one service attached to it.
To beat these arguments, you have to connect every single charge directly back to the specific treatment needed for the accident injuries. It’s that simple. If a doctor bills for a “telehealth platform fee,” for example, we’d better be ready to prove that a virtual visit was medically necessary (maybe the client couldn’t travel) and not just for convenience. More and more, the client has to prove why every dollar was spent.
Based on what we’re seeing, our legal strategy has to include a full, internal audit of all medical and related bills before they ever go to the insurer. Our process is:
- Pre-screening for questionable charges: We identify any fees that lack clear itemization or just look out of whack.
- Direct communication with providers: We get on the phone and request detailed breakdowns, written justifications, and any backup paperwork for charges that seem vague.
- Legal research into state regulations: We check if any Georgia statutes, like the ones for medical records costs, apply to the specific fee being challenged.
- Preparation of affidavits and expert testimony: If we have to, we’ll get sworn statements from the provider or bring in a billing expert to prove a charge is valid.
Getting ahead of it like this is the best way to stop an insurer from successfully calling a real cost a ‘junk fee,’ and it protects the client’s final settlement number.
To get through this ‘junk fee’ minefield, you need extreme attention to detail, constant communication with medical providers, and a solid legal plan. Without that, injured people will get less money because insurance companies are experts at using any fuzzy billing to their advantage.
What exactly is a ‘junk fee’ in the context of an auto accident claim?
It’s a charge, usually from a medical provider or repair shop, that an insurance company attacks as being excessive, not clearly explained, or not a direct cost of a service. They’re often vague administrative charges without specific itemization.
How do new regulations on ‘junk fees’ affect my auto insurance settlement?
Insurers are using the government’s focus on junk fees as a new reason to pick apart your bills. If they successfully label a charge a ‘junk fee,’ they’ll refuse to pay for it, lowering your total settlement unless your attorney can prove the charge is legitimate.
Can an insurer refuse to pay a legitimate medical bill by calling it a ‘junk fee’?
They can try, and they do. A good lawyer fights back by providing proof, detailed records, expert opinions, and evidence that the charge complies with state law, to show the cost is legitimate and must be included in the settlement.
What should I do if my medical provider charges fees that seem ambiguous?
Immediately ask the provider’s billing office for a fully itemized statement that explains every single charge. Then get that statement to your lawyer so they can analyze it and deal with any problem areas before the insurance company ever sees it.
Are ‘junk fees’ only an issue for medical bills, or do they apply to property damage too?
They pop up in property damage claims, too. Insurers will challenge things like “parts procurement fees” or “shop supply” charges from an auto body shop if they aren’t backed up with solid justification and documentation.
