When you're pursuing a personal injury claim following a car accident, you're likely to encounter several unfamiliar terms. One of these is subrogation. When dealing with an auto accident, this legal process allows an insurance company to make a claim against a third party, so that it can recover benefits it paid to the insured party. The intent is to obligate the company or the person who was responsible for the accident to reimburse the insurance company that paid out benefits to the party who had a valid personal injury claim after the wreck.
Subrogation is defined as the substitution of one person or group by another in reference to an insurance claim or debt. Essentially, it means one person or party stands in the place of another while accompanied by the transfer of any associated rights and duties. In a personal injury case, subrogation can apply to both car insurance and health insurance benefits.
If you've been involved in a car accident, subrogation issues can arise if you use your own insurance to pay for the care you need while fault for the accident is still being determined. Although your insurer will approve the initial claim, the company will want to be reimbursed for the expense when you collect damages from the insurance company of the at-fault driver.
Your own insurance company is often referred to as the collateral source when discussing subrogation rights.
How It Works
Whenever your doctor lists the medical care you've received resulting from an accident, your insurance company will send you a form asking for additional information. This form is used to determine if it's possible someone else may be financially responsible for your care.
After processing the form, your insurer is legally required to notify you if it intends to pursue a subrogation interest. Most insurance policies require you to fully cooperate with any subrogation attempts. This means you're forbidden from signing waivers or agreements absolving the other driver of financial responsibility for your injuries if he is found to be at fault for the accident.
Keep in mind that these efforts will include recovering the cost of any applicable deductible you paid. If subrogation is successful, you'll receive either a full or partial refund.
Subrogation is based on the concept that injured people should not be allowed to profit from their injuries. They are allowed to recover their actual damages, but a double recovery is prohibited.
For example, if you use your own health insurance to pay for $15,000 in accident-related medical care, you're not allowed to collect another $15,000 from the at-fault driver's insurance company and spend that money on whatever you wish. The payment goes to your own health insurance provider to reimburse them for the claim that has already been paid.
Preventing double recovery carries the collective benefit of lowering insurance rates for everyone by allowing insurers to be reimbursed for payments that were the legal responsibility of another party.
Subrogation and State Assistance Benefits
If your health insurance is provided through a government-sponsored program such as Medicare or Medicaid, the concept of subrogation still applies. Government programs will pursue their subrogation rights and prevent you from a double recovery of accident-related expenses.
Understanding How Subrogation Affects Your Personal Injury Claim
Keeping careful track of your accident-related expenses and the source of any payments made on your behalf can offer some insight into possible subrogation interests in your case. However, understanding subrogation interests can be complicated. To avoid costly mistakes, it's best to seek assistance from an attorney with experience in personal injury law and the complications that subrogation issues can present when negotiating a fair settlement for your injuries.
If you're offered a settlement from the at-fault driver's insurance company, some insurers may try to add a waiver of subrogation clause that prohibits your own insurance company from seeking reimbursement for previously paid claims. This might result in your own insurance company refusing to pay your claim, creating an unfair burden for you. To protect yourself, it's best to have your attorney review any document before you sign it. Please contact the experienced attorneys at Neblett, Beard & Arsenault to schedule a free, no-obligation case review.