Subrogation

Subrogation

Subrogation

There are lots of reasons why a person who has been injured due to someone else’s carelessness should always consult with an experienced attorney before trying to settle his/her claim. One of those reasons has to do with what is known as subrogation claims.  I am always amazed at the number of people out there who are completely unaware of the principle of subrogation and the effect it has on the settlement of personal injury claims.  A bit of explanation is in order. With the recent passage of the Affordable Care Act, I think it’s a fairly safe bet that most of the folks who are reading this blog are covered by some sort of private health insurance.  Those who are not may be able to look to Medicaid or Medicare to take care of hospital bills in the event of an unexpected injury.  Either way, it is becoming more common to find that folks who need hospital or medical care have some sort of insurance in place to pay the bills. Unfortunately, in many circumstances the hospital or medical care referred to above resulted from the carelessness of someone else.  Maybe a person gets hit by a drunk driver, or someone who was distracted by texting/cell phone use, or even a truck driver who fell asleep because of too many hours behind the wheel without sleep.  In any of those cases, it is likely that the injured party will hire an attorney to help in the prosecution of a claim against the party responsible for the accident.  As a part of that claim, the injured party will ask the jury to reimburse him for the amount of medical/hospital bills that were incurred as a result of the accident.  If $5,000 in medical bills were incurred, the injured party is, at the very least, entitled to receive $5,000 in compensation. This is where the principle of subrogation comes in.  Put in its simplest terms, subrogation means that if I collect damages for medical bills that were paid by my insurance carrier, I am obligated to pay that insurance carrier back the money that they paid out on my behalf.  An example might make this clearer.  Let’s assume I get hit by a drunk driver, and as a result I incur $10,000 in medical bills.  The bills are paid by my health insurance, which is provided to me through my employment.  I file a lawsuit against the drunk who hit me, and the suit is ultimately settled before trial.  Once I receive the settlement proceeds, my attorney will tell me that I am obligated to write a check to my health insurance carrier for the $10,000 they have already paid out on my behalf.  Despite the fact that I paid for that health insurance out of my own pocket, and maybe even despite the fact that the settlement was far less than I should have received because the at-fault driver had lousy liability insurance, I am still going to have to write a very substantial check to my health insurance company so that it can recoup what it paid out.  In some circumstances, courts have ruled that the insurance carrier’s right of subrogation takes priority, even if it means that the company collects every single penny of the recovery, leaving the injured party with exactly nothing in his pocket. This is precisely where the need for experienced legal help comes into play.  There are various legal principles that can be utilized to reduce the amount of money the injured party can be required to pay back to the insurance company.  In some instances, a lawyer may be able to convince the carrier to waive its subrogation claim entirely.  Each case will depend upon its own facts and circumstances.  The one thing that is certain is that an injured party who tries to settle his claim without experienced legal help runs the risk of losing a very large chunk of the settlement to his health insurance carrier. Subrogation is just one of the many factors that come into play when prosecuting a personal injury claim.  If you have a question about subrogation, please feel free to contact any of the attorneys here at Bordas & Bordas.  We would be happy to talk to you.