What’s A Subrogation Action?

If you’ve ever been in the emergency room after an injury stemming from an accident, you have found that your insurance company gladly paid your bills. There are, however, occasions when your insurance company may have called you back at a later date and asked you how your injuries took place. Your insurance adjuster may have even asked you if a third party was indeed responsible.

Don’t be surprised if your insurance adjuster did this. He or she was just following your insurance policy’s terms. The insurance adjuster was curious to know if someone else was at least partially responsible for your accident. Once he or she knows this it’s easy for the adjuster to predict if you plan on suing the other party for your injuries and any property damage sustained. Personal Injury Lawyer in Hamilton understands that part of the reason that the insurance adjuster does this is to determine if the company has to pay your entire claim amount.

Subrogation Rights and Interests

You’re probably familiar with the word subrogation if you’ve ever been injured in an accident and sustained damages. In this instance, you would be entitled to subrogate. From a legal standpoint, subrogation occurs when you’re hurt in some sort of an accident and someone else pays for your injuries.

That person can see your injuries from your standpoint during the subrogation process. Both you and the other party will have the same legal rights. Also, that other party can have the legal defenses that can and probably will be used against you used against them as well.

What is a collateral source?

According to subrogation law, a collateral source is a private entity. This tends to either be a government agency or a private insurance company. The private entity is the party that will pay your personal injury claim. When subrogation is involved, a certain part of the settlement or jury verdict must be used to compensate the collateral source for its payments to you. This provision is added because settlements in personal injury law are designed to restore you to your previous state. You are not entitled to make a personal profit off of the settlement.

Here’s an example. Suppose you sustained USD 15,000 worth of injuries in a car accident. You were reimbursed by your insurance company initially. But then you were compensated by the party that caused your injuries. In this instance, you would be required to return the $15,000 issued to you by your insurance company. Personal injury law doesn’t want you to be compensated twice for your injuries.Subrogation, in theory, helps keep insurance rates lower.

The same logic applies if you’re initially paid by a government agency for your injuries and are then paid by the person who caused your injuries. It doesn’t matter if the government agency or program is a federal workers’ comp program, Medicare, veteran’s benefits program, medical assistant, or state assistance program. Just keep in mind that these programs and agencies take subrogation seriously.

Worker’s comp subrogation example

If you’re ever hurt on the job your employer is generally partially responsible. However, another party is generally liable too. The law refers to this person as a ‘liable third party!’ Your employer can either sue the liable third party on your behalf or the two of you can sue that party together.

Subrogation works in this instance to ensure that you’re only paid once for your injuries by the liable third party. You’ll have to pay any amount that your employer’s workers comp program paid you back.

Subrogation and settlement

Subrogation becomes complex once you decide to sue the party who caused your injuries in court. In that instance, both you and the collateral source party (your insurance company) may be entitled to sue the at-fault party together.

What usually happens is that you’ll get a lump-sum payment (generally for a large amount) from the at-fault party. In this instance, you’ll have to pay back any monies the collateral source party may have paid you for your injuries.

State and Federal Subrogation Laws

Each state has different laws regarding how and when various private insurance companies can subrogate. These laws also affect the ways in which subrogation affects third-party settlements. If your insurance is through ERISA, your employer will have to subrogate while following federal laws.You should hire a personal injury lawyer if you have many parties asking you for subrogation.

Subrogation can be complex. You need to understand how it works if anyone wants to subrogate with you. You are probably clueless about this though, therefore you need to hire a good personal injury lawyer to help you understand this process better.