What Is a Subrogation Claim?

The term “subrogation” is not something that many people have heard of, but it is important to understand what this means if you have been involved in an accident in which insurance has paid some of the expenses. Subrogation deals with reimbursing insurance carriers for payments they have made on your behalf in the event you have been injured due to the negligence of somebody else. Here, we want to look into subrogation claims more in-depth and discuss how they may affect your total settlement in a personal injury case.

What Does Subrogation Mean in a Personal Injury Case?

At its basic form, the term “subrogation” means that one person stands in the place of another regarding a debt. When one entity or individual pays a debt that is ultimately the responsibility of somebody else, then the person who paid the debt originally may be entitled to reimbursement from the person who originally owed the debt.

If that sounds confusing, that is okay. We will look at an example of how this works for personal injury cases to clear up some of the confusion.

How Does Subrogation Apply to Personal Injury Claims?

Subrogation applies to personal injury claims because the person or entity who initially pays for an injury victim’s medical bills is often not the person who caused the injury in the first place. If you or somebody you care about has been injured in an accident caused by the negligence of another person, there may be various ways you recover compensation for these injuries. In the immediate aftermath of sustaining an injury, a person may turn to their own personal health insurance carrier or auto insurance carrier to help cover their injury expenses, even if someone else is entirely at fault for the incident.

However, your personal insurance or auto insurance carrier will usually have the right under the terms of your policy to be reimbursed the amount of money they paid on your behalf should you secure compensation from the at-fault party through an insurance settlement or a personal injury lawsuit award.

An Example of Subrogation in a Car Accident Case

Let us suppose that Sherry is injured in a car accident that is caused by David. However, there is a dispute as to whether or not Sherry was partially to blame for the crash. Meanwhile, Sherry incurs $10,000 worth of initial medical bills that her personal auto insurance coverage pays on her behalf while the case is ongoing. Ultimately, it is determined that David was indeed 100% at fault for the incident, and his insurance carrier pays $50,000 in total damages to Sherry.

In this case, Sherry’s auto insurance carrier will have the right to recover the $10,000 that they paid in her initial medical bills from that $50,000 settlement awarded by David’s insurance carrier.

This is how subrogation works in a car insurance case, though this is the same basic process for other types of personal injury cases that a person may be involved in.

Do You Need an Attorney?

You should certainly speak to an attorney for a free consultation in the aftermath of sustaining a personal injury in California. With a skilled Newport Beach, CA personal injury attorney by your side, you can be sure that all insurance claims will be processed correctly, including any subrogation claims made that are related to your case. By working with an attorney early in your case, you will increase your chances of receiving maximum compensation, thereby increasing the total amount you will receive after subrogation claims have been made.

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