If you were hurt in an accident caused by someone else’s negligence, you may be able to file an insurance claim with your own insurance provider. However, it may seek subrogation from the at-fault party’s insurance company. But what is subrogation? And how does it affect your rights? This is a critical term to understand when dealing with insurance claims.
What Is Subrogation?
Subrogation is a legal term that means someone assumes the legal rights of another, typically in relation to a legal claim or debt. One party substitutes another and receives their legal rights and duties in return. In this way, insurance companies sometimes take over their insured’s right to sue.
Subrogation often applies when an insured person uses their car insurance or health insurance benefits after an accident. The victim’s insurer may pay the initial claim, but it then has the right to sue or otherwise pursue compensation to be reimbursed for these claims if someone else is responsible for the injuries. Your insurer may have a right to be reimbursed from any insurance proceeds you receive from a legal claim against the at-fault driver.
Examples of Subrogation
Suppose you are injured in a car accident. You go to the emergency room to have your injuries treated. You provide details of your health insurance for this treatment. You sign a form that asks if someone else might be financially responsible for your care. You also file an insurance claim with your own comprehensive insurance coverage.
Your insurance companies approve your claims, paying for your medical bills and car repairs. They may send you documentation stating their intent to pursue a subrogation interest. They may pursue reimbursement from the at-fault driver’s liability insurance company, or they may require you to repay what they fronted from your settlement proceeds.
If your health insurance is from a public benefits program such as Medicare or Medicaid, the same concept applies. They may pursue claims or require reimbursement when your case settles.
It’s important that you understand this concept because it can affect the potential recovery you make for your personal injury claim. Your insurance policy also likely requires you to cooperate with their subrogation efforts.
Purpose of Subrogation
Subrogation makes it so the party responsible for the accident or the insurance company that covers them is the party ultimately held responsible for the resulting damages. It also allows you to use your own insurance to avoid the hassle of making claims against a third party, who may be more reluctant to pay what is fair in order to protect their own interests.
Subrogation also prevents double recovery. Accident victims have the right to recover compensation for the actual damages they sustain. If their insurance provider covered their medical expenses, they do not have the right to receive money for them from the at-fault party. Instead, that portion of the claim transfers to the insurance company.
Finally, this process helps the public by lowering collective insurance rates. Insurance companies can be reimbursed for the payments they make when someone else is responsible for them so that they can collect these payments from the at-fault party or their insurer.
How Can Subrogation Affect My Personal Injury Claim?
Subrogation can affect personal injury claims in many ways. It’s important you understand these effects as they can dramatically alter your claim and your rights. Here are some of the ways you can anticipate subrogation may affect your personal injury case:
- Lowering your net settlement: Subrogation claims can lower the net amount that you receive for your case. For example, if your settlement offer is $100,000, but you submitted claims to your insurance company for $20,000, your insurer may have a right to recover that $20,000, resulting in a reduced settlement value of $80,000. It’s important that you consider the value of your claim after these reductions so you know what you should fairly settle your case for.
- Requesting waivers: Some insurance companies may try to get accident victims to sign waivers of subrogation that prevent their insurance company from seeking reimbursement for claims related to the accident. If the victim signs a form of this nature, their insurance company may have the right to deny their claims or seek reimbursement directly from the victim.
- Reimbursing your deductible: If your insurance company receives money from the at-fault driver or their insurer, they may be able to recover your deductible, which can be returned to you.
These issues are complex, so it’s best to work with a knowledgeable lawyer who can help.
Contact Us for Help with Your Accident Claim
If you were injured in an accident and used your own insurance, you may need legal assistance to help with subrogation claims. An experienced attorney from Mission Personal Injury Lawyers can investigate your case, determine all parties responsible for it, and explain subrogation interests during a free case review. Contact us today to get started.
To discuss the compensation you can seek for your brain injuries from toxic exposure, contact Mission Personal Injury Lawyers at (619) 777-5555 for a free consultation. Our personal injury attorneys in San Diego are standing by.
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