What is Subrogation?
Texas Personal Injury Lawyer Explains the Process of Subrogation
You may have heard the term subrogation and wondered what it meant. Sounds like something out of a spy movie, but the reality of subrogation has nothing to do with subterfuge. Subrogation is the process in which one insurance company receives recompense from another insurance company for funds spent related to a loss for its insured customer.
Commonly, people mistakenly believe that subrogation enables the injured victim to receive greater compensation, but that’s not the case. Subrogation doesn’t benefit or harm the injured party. It’s merely a means by which the insurance company can recoup expenses in relation to the victim’s loss. More on this website
Some people hold the misconception that subrogation is a means by which an injured party can receive just compensation through his or her own insurance carrier. That’s not the case either. Your insurance carrier has no more interest in helping you than the insurance company for the party who injured you does. The only way to get just compensation is to hire an experienced attorney to look out for your rights.
The Subrogation Process
Normally, the subrogation process follows one of two patterns:
An insurance carrier believes that another entity will have to repay them in the long run, so they will “front” for an expense and then subrogate to the other party for reimbursement.
An insurance carrier will think that it needs to pay for damages incurred by an injured party, only to discover at a later date that another party was negligent and should have paid the money, so they will subrogate to attain reimbursement.
While the personal injury is likely new to you, chances are you’ve had to deal with car insurance. To illustrate the first example of subrogation: when you have an accident and your auto insurance policy pays for damage to your vehicle and a rental car as soon as the accident occurs even when the other party is at a fault. The other party’s auto insurance may take weeks to admit fault and pay for your damaged vehicle. In the meantime, how are you supposed to get around? Sometimes, your insurance company might even pay for repairs and then subrogate this expense to the other insurance company after the fact. The same principle holds true with a work-related injury. Often, your health insurance carrier will pay for medical bills, knowing that it can subrogate to the workman’s compensation policy when the time comes. More on this website
The second example of subrogation can be illustrated by looking at a case where an insurance company is unaware that another party is liable for an accident, or in some cases, that another liable party even existed. Recently, our firm won a convoluted work injury case in which the injured victim was working for a temp agency. He was placed with another company where he was injured. The company that was borrowing the worker didn’t have workers’ compensation insurance, but the temp agency did. The temp agency acted responsibly and paid the worker to the tune of a six-figure settlement. However, our investigations later revealed that the other company was liable, and the workmen’s compensation insurer for the temp agency was able to subrogate the settlement against the liable party they previously didn’t know existed.
In most cases, subrogation neither hurts nor helps an accident victim. It’s just a way by which insurance companies divert the expense of paying benefits between each other. The only way an accident victim can be further victimized by subrogation is when he or she falsely concludes that they don’t need to consult with a lawyer because their needs are being met by subrogation.
If you’ve suffered a personal injury, and you have more questions about subrogation, call our Law Office today for a free consultation.
