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Typically, a person injured in an accident that isn’t their fault seeks compensation for the resulting expenses and impacts, such as medical bills and car repair or replacement. They pursue this compensation by filing a claim against the at-fault party’s liability insurance policy. However, several reasons can delay this compensation.
Subrogation is a process in which the claimant’s own insurance company covers the costs associated with the accident and then pursues the at-fault party’s insurance provider for reimbursement of the funds provided to you. An experienced personal injury attorney can handle the insurance companies for you. Here is a look at how subrogation works and why insurers do it.
If you’re in a car accident and the insurer has not yet determined fault, you can file a claim on your collision coverage. This claim allows you to obtain the compensation you need while waiting for fault to be determined. If another driver is at fault, your insurance provider can then seek to recover the amount of coverage they provided to you from the at-fault party. As noted by Allstate, your insurance provider can also often recover the cost of your deductible for you.
Subrogation is a common feature of claims involving premises liability matters and property insurance. Additionally, if you utilized your own or employer-sponsored health insurance, that insurance provider can also seek subrogation from the liability insurance policy of the at-fault party.
Subrogation can take weeks, months, or sometimes even years to complete. Often, the claimant is unaware that subrogation needs to be handled, and in some cases, for an injured party without an attorney the amount is communicated between your insurance provider and the provider of the at-fault party’s liability insurance. However, it is your responsibility to make sure the subrogation is satisfied before or at the time of settlement with the at-fault driver’s insurance, or you can end up having to pay most or all of your eventual settlement to the subrogation interest holder.
However, in other cases, the at-fault party’s provider refuses to accept liability, and either a court must decide the matter or through a lengthy personal injury claims process. In these cases, the claimant’s health insurer or even medical provider can use subrogation by filing a lien on the settlement or award.
This lien means the insurance company or medical provider has asserted a legal right to obtain payment of the compensation they provided you when you receive the settlement or award.
Subrogation benefits insured individuals by allowing them to obtain the compensation they need quickly after an accident rather than waiting for fault to be determined.
In addition to receiving a timely payout through your own insurance provider, some of the beneficial features of subrogation include:
If your insurer will pay your expenses and then act on your behalf to recover the same amount as they paid you plus your deductible, do you even need to file a personal injury claim?
While you are the only one who can surely say whether you need to file a personal injury claim, it is important to understand that the process allows you to seek compensation for more than the expenses that your insurance covers.
You can also seek compensation for non-economic damages, which involve the impacts that the injury has on your life, such as physical pain and suffering, emotional distress, or loss of the enjoyment of life. These damages can make up a big part of your claim’s value, but your collision policy will generally not cover non-economic damages.
Your settlement or court award is generally sent directly to your attorney when you have a successful outcome to your personal injury claim. The attorney will deposit the funds into a trust account.
From that account, they will:
Following these two deductions, they will meet with you to finalize your case and turn the remainder of the funds over to you. As you can see from this process, you will not receive the percentage of the award designated as payment for your attorney’s services. Additionally, you will not receive the portion of the award used to satisfy liens. However, this money was used to pay for expenses that you would have incurred and paid out-of-pocket had your insurance company not provided coverage for them.
In the big picture: most personal injury claimants do not lose money due to subrogation, but it will reduce their net settlement. The main premise of subrogation is that the claimant simply won’t get funds their insurance company already paid out, since that amount will be turned over the subrogation interest. However, this is where a skilled personal injury attorney can help negotiate the subrogation interest lien amounts down, and help you net more from your overall settlement.
An experienced personal injury lawyer not only provides services to assist you in resolving your personal injury claim but continues to fight for your right to compensation by negotiating liens placed against your settlement or award. Here is a look at some of these services.
Establishing the value of a personal injury claim isn’t just a matter of adding together the expenses you incurred.
While these bills are certainly part of your claims’ value, don’t forget to consider:
Personal injury attorneys are skilled negotiators, which is helpful when working out a settlement. Your attorney can manage communication with the at-fault party’s insurer to garner a fair settlement offer on your behalf. They can also manage communication with your insurer to negotiate the liens. Often, insurance companies will agree to accept a lower amount during subrogation, which means you receive more of your award.
One of the main hold-ups in receiving a settlement through a claim filed against the at-fault party’s insurance policy is a lack of clarity over who was at fault. Many accidents do not follow the stereotypical pattern: one at-fault party and one injured party. In truth, many cases feature liability from multiple parties, as well as multiple injured parties. It can take time to determine who was responsible and how much responsibility they had.
Your insurance company will be advocating for themselves during this process, using subrogation to recoup the expenses they cover. The at-fault party’s insurance provider will also advocate for themselves by attempting to shift liability off their insured and onto other parties.
Your personal injury attorney is your advocate during this process, gathering the evidence and witness testimony needed to prove the elements of liability, which include:
Most personal injury claims settle out of court. However, if the at-fault party’s insurer fails to compensate the claim, you can file a personal injury lawsuit and request a judge or jury determine liability and compensation. Your insurance company is also permitted to take the at-fault party’s insurer to court for failure to reimburse them for the expenses you incurred and they covered.
Upon the successful resolution of your claim, your attorney will assist you in collecting your settlement or award and satisfying the subrogation liens placed on the award. As mentioned, they can negotiate these expenses on your behalf so you can receive more money after you pay back your own insurance company.
If an accident that wasn’t your fault injured you, contact an accomplished personal injury attorney who can help you understand the personal injury claims process and how to recover the most compensation possible. Set up a free case evaluation and let an attorney help you on your way to recovery.