Insurance, Subrogation and Your Injury Claim
When your insurance company pays you for damages to compensate for an injury, it can pursue the defendant for repayment of its financial outlay, a process known as “subrogation.” Subrogation is a right held by most insurance companies to legally pursue a third party that caused an insurance loss to the insured. This is the way your insurance provider may recover the money it has paid for your damages.
For example, after a car runs a red light and crashes into your vehicle, injures you, and damages your vehicle, “Your insurance carrier … pays you for all of your expenses related to the accident, then seeks reimbursement from the at-fault party’s insurance carrier,” according to Amis Insurance. “Your insurer is ‘subrogated’ to the rights of your policy to recover any amount paid out on your behalf.”
Will your crash and the payout and subrogation process affect your future insurance coverage? Subrogation appears in most insurance contracts, which state “Insured will not act in any way that would limit or otherwise diminish the insurer’s right of subrogation.” When you purchase your vehicle insurance policy, you are not likely to know what that means. Then the accident happens; the question of subrogation comes up; and you know that you need to consult an experienced personal injury attorney.
Your attorney will educate you. The law says your insurer must inform you, the insured, when it is going to seek subrogation. An investigation may be necessary to determine which party to the crash is responsible, and whose insurance company will pay. When this happens, you may receive your payout before it has been determined which party was at fault. Your risk is that you may be found wholly or partly responsible for the crash, which will reduce the amount of damages you may receive.
The law requires that your insurance company advise you when it is going to seek subrogation, and it also has to try to recover the deductible you needed to pay, and refund the amount of the deductible, again prorated by percentage of your responsibility for the collision. “If an insurance company does decide to pursue subrogation, however, the law requires that they inform you that they are doing it,” says dmv.org. “… Generally, your insurance policy will require you to cooperate with any attempts by the insurer to pursue subrogation. …This means you may not be allowed to sign any waivers or agreements that release the other driver from responsibility if the other driver is judged to be at fault in the accident.”
Amis Insurance advises, “Subrogation is important because any monies recovered through the subrogation process go directly to the insurance company’s bottom line. A company with an effective subrogation department can offer lower premiums to their policyholders.”
At Hudson Law Firm, we put PERSONAL back into Personal Injury Law. For an injury claim evaluation, call us at (972) 360-9898, or visit our website to chat with an associate. We understand and care about your injury, and look forward to helping you with your accident claim.