Subrogation is another legal term that plays an important role in many personal injury and workers compensation cases, and yet, many non-lawyers have no reason to understand how it works.
Subrogation is how we describe the right that an insurance company has to be repaid if it paid a bill and it later turns out that someone else was responsible to pay for the same bill.
If a person is injured in a car accident or at work, they will often have medical bills. Eventually, the insurance companies for the other driver or for the employer may have to pay those bills; however, the doctors and clinics usually do not want to wait until those battles are all sorted out to get paid. So, the bills will be sent to the injured person’s health insurance company. The health insurance companies usually agree to pay a share of the bills while things are being sorted out. They also usually demand to be repaid once the car accident or work injury cases settle.
Many of my clients are upset when they learn that portions of their settlements need to be paid to their health insurance companies. After all, they probably paid a lot of premiums to buy health insurance in the first place. What is important to understand is that the health insurance company’s right to subrogation is part of the contract of insurance that was purchased. If a person wanted to pay more for health insurance, they could probably purchase health insurance that did not include a right to subrogation.
I often get calls from injured people who did not have an attorney when they receive offers to settle their cases. They usually wanted to know what I think about the offers. Very few of them understood that they may have had to repay their health insurance companies from the money that was offered.
Please consider consulting an experienced attorney before settling claims on your own.
If you have any questions, please contact us.
