When you’ve been injured in a car accident, there are several ways in which you can pay for your medical treatment. We’ve discussed Personal Injury Protection (PIP) coverage in previous posts, which can pay a majority of your initial medical bills up to $10,000 (provided that you qualify). But what about any remaining balance, or any medical costs exceeding PIP?
If you have health insurance, we highly recommend that you use your health insurance for those bills, when possible. However, at some point, you will be making a claim against the at-fault driver’s insurance company to recover, among other things, compensation for those same medical bills. The question we are often asked is “Do I get to keep the money I recovered for my past medical bills that my health insurance paid for?” The answer to this question is “No.” This is where subrogation comes in.
What is Subrogation?
Subrogation is an insurance company’s right to be reimbursed for the money it has paid on your behalf by the at-fault party. For example, if your health insurance paid $10,000 in medical costs for your treatment and the at-fault driver’s insurance company pays that $10,000 back to you, your health insurance company has the legal right to be reimbursed the $10,000 it has paid. In reality, you would not be the one paying that back, as it would come directly from your settlement with the at-fault driver. Accordingly, it’s the at-fault driver’s insurance that would be paying it.
An insurer’s right to subrogation is not limited to just medical costs. Subrogation is also very common when it comes to property damage. For example, when your car is damaged and the other driver is at-fault for the accident, your car insurance may pay to repair or replace your vehicle. However, your insurance company is not going to just pay this money and forget about it. On the contrary, it now has the right of subrogation – which is to pursue the at-fault driver’s insurance company for reimbursement of the money it paid to repair or replace your vehicle. Your insurance company can do this because the other driver is responsible for causing the damage. This is subrogation.
As you can see, subrogation will have no real effect on your personal injury claim – other than to prevent the double recovery of payments made on your behalf that have been reimbursed by the at-fault party. However, if you fail to inform your insurance company of a recovery for which it has the right of subrogation – you could be held personally responsible for repaying those funds, which sometimes can be quite substantial. This is why you need an experienced Ruskin personal injury attorney to handle your claim. The attorneys at SouthShore Injury Attorneys can help you navigate the insurance minefield. This means that you will have more time to focus on what really matters after an injury – healing.
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