Basic Facts About Subrogation

Many people know that if they are injured in a car accident as a result of someone else's negligence, they may have a legal claim to be compensated for their medical bills, pain and suffering and other costs. What most people do not realize, however, is that in many cases, health insurance providers expect to be paid some or all of the settlement they reach with the at-fault party. Why does this happen? If a health insurer is supposed to pay for a person's medical bills, why is it that they can demand that the victim pay part of their settlement? This concept has been around a long time, and is known as "subrogation."

The basic idea behind subrogation is that insurers have a right to receive payment for bills that they have paid on behalf of their insureds. For example, in the event of a car crash, a person may suffer serious injuries that require thousands of dollars' worth of medical treatment. Insurers will pay those bills and then seek remuneration from the at-fault party on behalf of their insureds, either by filing a lawsuit or agreeing to a settlement.

Of course, insureds have a right to bring suit against the parties that have caused their injuries. If an insured wins a suit against or settles with an at-fault party, the insurer will demand remuneration from its insured. What many people do not realize is that their insurance contracts contain clauses that allow their insurers to seek reimbursement for payments, such as medical bills, made on their behalf.

Can I Avoid Subrogation If I Settle My Case By Myself Without Negotiating A Deal With The Insurer?

No. The insurer who has the right of subrogation may seek to assert its rights well after you receive, and maybe even spend, your settlement proceeds. Your insurer may seek to recover from you later on, when you have none of your settlement money left.

One of the advantages of having an attorney to help you resolve your case is that your attorney is knowledgeable of many of the issues subrogation presents. Often, it is to the injured person's benefit to resolve the subrogation issues prior to, or at the same time as, resolution of your case. By handling things in this fashion, you can receive the benefit of knowing that you will not be at risk of having the insurer come back to you months, or years later, demanding payment from you. By having an attorney that does not charge you a separate fee to negotiate the subrogation portion of the claim, you receive the benefit of both worlds -- a settlement of your case, plus peace of mind from knowing that money is yours, free and clear. Let an experienced attorney give you personalized advice as to how to handle your case, as well as how to deal with any subrogation issues.