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What Is a Subrogation Claim?

Posted on February 11, 2022 in

If you get injured in an accident in Arizona, you may not have the funds to pay out of pocket for your necessary medical care – especially if you have a serious injury that requires emergency medical intervention or immediate surgeries. Your health insurance or auto insurance company may step in to pay these costs for you. Then, the insurance company can file what is known as a subrogation claim to recoup the money it spent.

How Do Subrogation Claims Work?

“Subrogation” means to substitute one party for another in respect to an insurance claim or debt. In other words, one person or party steps in to fill the shoes of another. Typically, subrogation refers to an accident victim’s insurance company paying for a victim’s upfront medical costs or property repairs. Then, if it is later determined that someone else is financially responsible for the accident, the insurer that paid can file a subrogation claim for reimbursement.

A subrogation claim is generally brought against the settlement or judgment award collected by an accident victim. If your insurance company wishes to bring a subrogation claim after paying for your accident-related costs, it must notify you in writing. You will not need to do much as the victim if you receive this notice; the insurance company – or your attorney – will take care of the subrogation process while you concentrate on injury recovery. Subrogation claims are most common in Scottsdale car accident cases but can arise in many different types of cases.

Can a Subrogation Claim Affect Your Personal Injury Settlement?

The purpose of subrogation is to prevent a victim from being able to recover compensation twice for the same accident and injury. Without subrogation, an accident victim could receive coverage from his or her insurance company for the costs caused by an accident, and then also recover financial compensation for the same costs from a defendant with a successful personal injury case. Subrogation prevents this double recovery. 

If your personal injury case involves a subrogation claim brought by an insurance company, you can expect part of your settlement or judgment award to automatically be sent to your insurer. The subrogation claim will be fulfilled first – minus any fees or deductibles that you paid your insurance company out of pocket for the coverage. Then, any remaining amount will be given to you to pay for other accident-related bills or make up for pain and suffering.

Subrogation does not reduce your financial recovery. Since your expenses were originally paid by the insurer, you will not lose any money if subrogation results in part of your settlement being allotted elsewhere. If you do not have grounds to file a lawsuit against a third party for causing your accident or injury, your insurance company will also be unable to pursue a subrogation claim as a result. This is because subrogation gives an insurance company the same rights and legal opportunities as the policyholder when seeking financial compensation for an accident.

Can a Personal Injury Lawyer Help With a Subrogation Claim?

Although subrogation may not require your direct involvement as an accident victim, it is something that can affect your claim and payout. If you do not understand the details of a subrogation claim, you may accept a settlement from a third party without realizing that some of it – a significant portion, in some cases – will go to your insurance company as part of a subrogation deal. This may lead to you accepting a settlement that is less than you require.

A personal injury lawyer in Scottsdale, Arizona can review a subrogation claim on your behalf, explain how it may affect your case and deal with related issues for you, such as a waiver of subrogation. This is an agreement that will prevent your insurer from acting on your behalf to recover costs from an at-fault party. A lawyer will protect your rights and best interests throughout your case, whether or not it involves a subrogation claim. For more information about how an attorney can help you, contact Stone Rose Law for a free case review.