If you have ever received medical care after suffering a personal injury, your health insurance company may have sent you a letter asking for information about the cause of your injuries.
At the time, you may have wondered why they needed to know this information.
This letter could indicate that your insurance company is looking to recover costs from the party at fault or their insurer through the process of subrogation.
What is Subrogation?
Subrogation is the legal right of an insurance company to “step into the shoes” of its insured and take legal action against the party at fault for damages or injuries suffered by the insured. Through subrogation, the insurance company is able to recover the money it paid to the insured.
How Does It Apply If I’ve Been in an Accident?
Insurance companies play a key role in personal injury cases. They mediate between the injured person and the party at fault. Health insurance, auto insurance, or workers’ compensation may cover your injuries, depending on the type of accident. Your insurance company may pay for your expenses before fault has been determined or you have filed a personal injury lawsuit. It may step in so that you don’t have to pay out of pocket.
But what happens if someone else is responsible for your injury? For example, let’s say that your car was damaged in an accident caused by another driver’s carelessness. You file a claim, and your auto insurance company pays for the repair expenses. Or perhaps you slipped and fell in a restaurant due to a wet floor. You see a doctor for your injuries, and your health insurance covers the cost of your treatment.
If your insurance policy has a subrogation clause, it allows your insurer to recover costs from the at-fault party after an accident. If you settle your personal injury case or win at trial, your insurance company may take part of your award. This is known as a subrogation claim. The amount you receive will be reduced to prevent you from being compensated twice for the same injuries, and your insurance company will receive reimbursement for the expenses they have already incurred on your behalf.
Are Subrogation and Reimbursement the Same Thing?
Subrogation and reimbursement both help insurance companies recover costs after a claim, but they work differently. With subrogation, the insurance company takes action directly against the at-fault party after they’ve paid your claim. With reimbursement, however, the insured repays their insurance company for expenses they previously covered while their claim was pending.
Does Texas Follow the “Made-Whole Doctrine”?
Yes. Under the made-whole doctrine, an insurer cannot use its subrogation rights until the insured has been fully compensated for their losses. This rule ensures that you recover not only the amount paid by your insurer but also any additional damages you may have suffered (e.g., pain and suffering).
The Made-Whole Doctrine protects the rights of the insured. For example, if you have $10,000 in damages after a car accident and you receive $5,000 from your car insurance company, they can seek reimbursement of $5,000 from the at-fault party or their insurer, while you can pursue them for the remaining $5,000.
How Can You Protect Your Rights Regarding a Texas Subrogation Claim?
Make sure to track all expenses from your accident. Also, record any payments your insurance company has made for you. It is also important to give your attorney a copy of all relevant insurance policies so that they can determine whether your insurance company has the right to make a subrogation claim.
How Will Subrogation Affect My Personal Injury Case?
A subrogation claim can influence the outcome of a personal injury claim. The amount you receive may be less if the insurance company is able to recover a significant amount through a subrogation claim. The subrogation process can be complex, thus prolonging the settlement of your claim.
It can be difficult to understand your subrogation interests as well as your insurer’s subrogation interests. An experienced personal injury lawyer can help you know your rights and responsibilities. They will make sure your interests are protected.
After an accident, you may be offered a settlement from the at-fault driver’s insurance company. The settlement may include a waiver of subrogation clause that would prohibit your insurance company from seeking reimbursement of any claims it already paid on your behalf. This waiver, which is generally permissible under Texas law, could impact your insurance company’s future actions.
Know Your Rights When Subrogation Comes Into Play
Subrogation can significantly impact the outcome of your personal injury claim, especially when it comes to how much compensation you ultimately receive. While it allows insurance companies to recover what they’ve paid out, it’s crucial that your rights are not overlooked in the process.
By understanding how subrogation works and how Texas law affects your case, you can better navigate your claim and avoid unexpected reductions in your settlement. A knowledgeable team member at Anderson Injury Lawyers can help you protect your interests, ensure fairness, and guide you through any subrogation issues that may arise. You can contact us online or call (817) 294-1900 for more information.