Blog, Personal Injury

What is Subrogation? How Does it Affect My Accident Claim?

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Subrogation is a word often used when dealing with insurance companies.  It is not only a difficult word to understand, but it is also a confusing topic that we will try to break down for you.  To keep it in context, you probably have only heard the word subrogation when speaking with your health insurance company, or if you’re on a public healthcare program, such as Medicaid.  Hearing the word repeatedly only begs one question: What is it and how will it affect your accident claim?

Subrogation is explained on esurance.com as “allow[ing] your insurance company to recoup the accident costs, including your deductible, from the at-fault driver’s insurer.”  Say what?  In simpler terms, subrogation is the process YOUR insurance company goes through to get their money back that they paid out for you from another insurance company.

Health insurance and subrogation

An easy example is your health insurance.  If you are in an accident and your health insurance pays for the ambulance ride to the emergency room, under most policies they will want their money back.  Who do they get it from? Not you…you didn’t cause the accident, so they go after the insurance company of the person that caused you harm, or the at-fault driver.

When you file a claim, other “parties”, such as your health insurance company and maybe your auto insurance company, are going to want to get their hands on some of your settlement money too.  They want to be “made whole.”  It is our job to make sure they only get what they are entitled to, and the rest goes to you.

Subrogation confusion and your accident claim.

What adds to the confusion is that usually more than one insurance company is involved.  A basic two party accident can involve your health insurance company, the other driver’s auto insurance policy and your auto insurance company depending on the amount of your medical bills and the damage to your vehicle, or if you received rental benefits from your own insurance policy.

I am sure you are probably bored and want to click on from this page, but if you were in an accident and plan on filing a claim, this is important stuff you should know.

Accident Attorney and subrogation

When you hire an attorney, this whole subrogation mess should be taken care of.  It’s what any experienced accident lawyer deals with every day.  Your accident lawyer will deal directly with all insurance providers and straighten out who get what and at what amount based on the law.  There are some mandatory reductions that insurance companies must take into consideration when settling a lien.

What is a subrogation lien?

Lien?  That’s right, a lien.  Insurance companies can and will file a lien on your settlement proceeds.  They will legally place a “hold” on your settlement funds until they get their money.  In fact, there have been many accident victims and even other insurance companies that have been punished by the court system for not dealing with these subrogation liens.

So in the end, what does all this mean to your accident claim?  Well a few things.  Number one, it determines how much money you are going to get back from the insurance company of the at-fault driver.  Secondly, it may cause a huge delay in getting your settlement calculated depending on the how fast your insurance company deals with your medical bills or property damage claims.  If your lucky, they will get it done quickly and not cause a problem when your settlement money arrives.

Confused? Hire an accident attorney!

How do you avoid all of this subrogation stuff?  Well, hire a lawyer.  Hire an experienced lawyer, like our firm, and avoid dealing with any of it.  Let your lawyer do the work and deal with the various insurance companies and medical providers.

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Written by
Tim Miley
Tim Miley is the founder of The Miley Legal Group. After earning his undergraduate degree in finance at Southern Methodist University in Dallas, TX, Tim attended Duquesne University in Pittsburgh, PA, where he received his Juris Doctorate. Tim is admitted to practice in all courts in West Virginia and is currently a member of the American Association for Justice, the West Virginia American Association for Justice, the West Virginia Bar Association and the Harrison County Bar Association.
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The Miley Legal Group editorial department has a rigorous fact-checking process, starting with our strict sourcing guidelines.

Our writers only gather information from credible sources. This includes peer-reviewed medical journals, reputable media outlets, government reports, court records, and interviews with qualified experts.