What Is a Subrogation Claim in a Personal Injury Case?
During your personal injury case in Kentucky, you may hear the term “subrogation.” This refers to a process where another company seeks repayment for the money that it previously paid out on your behalf, such as money to cover your medical bills. Subrogation is a way for a party that paid for your losses but is not liable for your accident to recover what it spent on your behalf. How you or your lawyer deals with subrogation could affect your final payout.
What Is Subrogation?
Subrogation is the substitution of one party by another, often in respect to an insurance claim. It means that one party has stood in place of another. When a subrogation claim takes place in a personal injury case, it seeks reimbursement for the money that an entity spent when standing in for the liable party. Typically, a subrogation claim is brought against the settlement or judgment award of the injured victim. This means that if the victim obtains financial compensation for his or her case, part of the award will go toward satisfying the subrogation claim.
Subrogation during a personal injury case most commonly involves medical bill payment. Most injured victims require immediate medical care for their injuries. Rather than paying for this care out of pocket, their own insurance companies – such as a health insurance company or car insurance provider – may step in to cover the medical bills up front. If a different party is later found to be legally responsible for the injury, the party that paid for the medical bills can file a subrogation claim in pursuit of reimbursement. Subrogation helps to reduce nationwide insurance rates by reimbursing insurance companies for footing the bill for other parties.
Who Has Subrogation Rights?
Insurance companies are the most common parties involved in subrogation claims during personal injury cases. Any insurance company that paid all or part of a victim’s medical fees, property repairs and other expenses could assert subrogation rights if a third party is found liable for the accident. However, insurance companies are not the only parties with this right. Government programs may also be owed money through subrogation, including workers’ compensation, Medicare, Veterans Benefits and state assistance programs.
How Can Subrogation Affect Your Personal Injury Settlement?
If one or more parties has grounds for a subrogation claim in your personal injury case, this could affect how much you can keep out of a settlement or judgment award won. While you will not pay out of pocket to satisfy a subrogation claim, it can come out of a monetary recovery given to you by the defendant (or his or her insurance company). If the subrogation claim is valid, the amount in the claim will automatically be sent to the party that stood in as the payer. If your health insurance company paid $10,000 for your medical care, for example, a subrogation claim for the same amount could reduce your settlement by $10,000. This is because you legally cannot recover compensation from the same injury twice.
Can You Negotiate a Subrogation Claim?
It may be possible to negotiate the value of a subrogation claim during a personal injury case in Kentucky, depending on the circumstances. An attorney can carefully review your medical bills, for example, to find out if the hospital overcharged you for your treatments. This could reduce the overall amount that you owe to the party who paid for your medical bills. In addition, if the value of your case is worth the limits of an insurance policy or more, the party with the subrogation claim may not receive any reimbursement. This is because the full amount available may be given to you for your injuries and losses.
It is important to consult with a personal injury attorney in Louisville if your case involves subrogation. A lawyer can help you navigate this complicated aspect of the law.