A subrogation claim is how your insurance company attempts to recover reimbursement from the at-fault party’s insurer for the benefits they have paid out under your policy. A literal definition of the word “subrogation” is to stand in the shoes of someone else.
Depending on the type of insurance coverage you have, you might choose to file an insurance claim under your policy after an accident rather than filing a claim directly with the at-fault party’s insurer. For example:
It is often a more straightforward process, and as a policyholder, you have more rights and better service. Your insurance company will basically front the money to you as a policyholder. However, when another party is liable for your injuries, your insurer has the right to “step in your shoes” to seek reimbursement from the at-fault party personally or their insurer.
For example, say a driver runs a stop sign and totals your vehicle, causing you severe injuries. You may choose to file a claim with your auto insurer if you have collision coverage to pay for a rental vehicle, the value of your car, and possibly medical care. In turn, your insurance company will pursue a subrogation claim against the at-fault driver’s insurance company to recover compensation for those benefits they provided. Since you will have had to pay your deductible, you may get that money back if your insurer is successful with their subrogation claim.
Subrogation laws help reduce insurance rates but also exist to prevent victims from receiving a “double-recovery” for the same injury or property damage. If you pursue a personal injury lawsuit against the at-fault party, subrogation can impact the amount of compensation you receive since your insurance companies have the right to claim a portion of your award. If your insurers don’t pursue a subrogation claim, you will still have to use your award to reimburse the costs of the benefits they provided. If your insurers have completed a subrogation claim, your personal injury compensation shouldn’t be affected since the amount will typically not include the payment meant for reimbursement.
If you file a claim with any of your insurance carriers after an accident, your policy will have a subrogation clause, giving them the right to part of your settlement. However, you can often negotiate a subrogation claim for less than the total amount an insurer has paid on your behalf. With an attorney’s help, your financial obligation may be drastically reduced so that you are able to keep a fair portion of your award. They will work directly with the insurance companies to ensure you do not reimburse more than is required. A San Diego accident attorney can also help you understand in advance exactly how much of your personal injury compensation you will get to keep and how much will have to be paid back in subrogation.