What Is a Subrogation Claim?
October 14, 2023
Why Do Subrogation Claims Occur?
Subrogation refers to the act of one party taking over the legal rights of another party to seek damages through a lawsuit. If you are involved in an accident, your car or health insurance company may pay upfront for some of your expenses relating to the crash. Through a subrogation claim, your insurer can then sue the at-fault party to recover the amount they paid for your damages.
Your insurer must inform you if they intend to file a subrogation claim. In many circumstances, this aspect of your personal injury case will occur in the background or be handled by your lawyer, so you will not need to be involved. However, it is vital to understand how subrogation works because it may impact the total value of your settlement, or you may be asked by the other party to sign a waiver of subrogation. A knowledgeable California personal injury lawyer can answer any questions or concerns you may have about subrogation so you can confidently proceed with your claim.
What is the Process for Subrogation?
Motor vehicle accidents are one of the most common types of claims where subrogation occurs, although other types of personal injury claims and workers’ compensation claims can also involve subrogation.
Imagine a driver is struck by another motorist. Their vehicle is totaled, and they have medical expenses for their injuries. Suppose the at-fault driver is uninsured or underinsured, or the investigation into the details of the accident is ongoing, delaying payment for the injured driver’s damages.
In that case, the insurer for the driver of the totaled vehicle may step up and pay for the damages up to the extent of the driver’s coverage limits. This action by the insurance company ensures that the driver is not without a car and can receive necessary treatment while they wait for their claim to be resolved.
However, the driver may need to pay a deductible if their insurance plan requires it.
The insurer can then turn around and file a subrogation claim against the at-fault driver or their insurance to recoup expenses and the deductible paid by the driver. Through the laws of subrogation, the insurer has the legal right to step in and file a lawsuit on behalf of the policyholder. If the court rules in favor of the insurer, they will receive the awarded settlement amount directly.
What if You Were Partially At Fault for the Accident?
Subrogation can become much more complex in cases where the fault for the accident is less clear-cut or there are multiple at-fault parties. Because California operates under a pure comparative fault system, the settlement amount you can recover in a personal injury claim will be reduced by the percentage of fault assigned to you. This law can also apply to the damages the insurer seeks on your behalf.
For example, if your car insurer is attempting to recoup the deductible you paid and you were found to be 20% at fault for the crash, they would only be able to recover 80% of the deductible amount for you. However, the details of your claim can vary depending on the circumstances of the accident. Your personal injury lawyer can help you understand what impact the allocation of fault in your case could have on any subrogated claims and your case as a whole.
What Effect Does Subrogation Have on a Personal Injury Case?
When an accident occurs, you must promptly notify your insurer and keep them up to date on any legal action you are taking regarding the case. The insurer will inform you if they decide to file a subrogation claim on your behalf. Generally, you will not be required to take any action, and the insurance companies will settle the issue on their own. Occasionally, you or your lawyer may be asked to provide further information on the case. At this point, you should seek advice from your legal team to ensure that you cooperate with the insurer’s requests without harming your ongoing claim in any way.
The critical thing to remember about subrogation is that the law prevents an injured party from collecting the same damages twice. The purpose of a lawsuit is to make you financially whole after an accident, not to allow you to profit from your injuries. If your insurer has already paid for repairs to your vehicle or other damages and filed a subrogation claim, you cannot seek payment for those damages as part of your settlement award.
What is a Waiver of Subrogation?
During settlement negotiations, the at-fault party’s legal counsel may offer you a waiver of subrogation. By signing this waiver, you are removing your insurance company’s ability to file a claim against the at-fault party on your behalf. It is crucial to thoroughly discuss this waiver with your lawyer prior to signing to understand the ramifications it could have on your claim and settlement.
Typically, you must also inform your insurance company before signing a waiver of subrogation. Your policy documents should include information on this process and any legal requirements.
How Can a Personal Injury Lawyer Assist You?
Subrogation claims can be confusing, but an experienced California law firm can walk you through each step of your claim and answer any questions you may have. In addition to managing all aspects of your personal injury case, from investigation to negotiations, the Law Offices of Preston Easley can handle any communications with your insurer regarding subrogation so you can focus solely on your healing and recovery. To learn more about how subrogation could affect your specific case, contact our office today at 310-361-9484 to schedule a free consultation.