Subrogation

Subrogation is a common occurrence in personal injury cases, but many people aren’t sure exactly what it means for them or their claim. Most cases feature some degree of subrogation, typically from insurance companies. Find out what it means for you and how an experienced attorney can help you navigate this process so you can obtain the maximum financial award.

What is subrogation?

Subrogation occurs when one party stands in for another party in a legal claim, usually to claim part of their financial recovery. Subrogation usually involves insurance companies, as they pay off a significant portion of a victim’s expenses from an accident. If you’ve received money from your insurance company for medical bills or car repairs after an accident, they may subrogate your claim.

How does subrogation work?

Here’s an example of how subrogation works:

1. You are involved in a car accident with an uninsured driver. You are injured and experience months of severe pain. 
2. Fortunately, you happen to carry uninsured motorist insurance, so your own insurance company steps in. They pay $14,000 for your medical bills. 
3. Separately, you pursue a lawsuit against the uninsured driver. The court decides in your favor, and orders the driver to pay you a total of $20,000—the cost of your medical bills plus $6,000 for physical pain and suffering.
4. Your own insurance company submits a subrogation action and requests $14,000 of your $20,000 verdict. This pays them back for the money they spent on your medical bills.  You get to keep the remaining $6,000.

Is subrogation fair?

Subrogation can seem unpleasant because another party is stepping in and claiming some of the money you were awarded.  However, the other party can only do that if they’ve already helped you pay for your injury.  If subrogation didn’t exist, you would essentially get paid twice—once from the insurance company and once from your lawsuit.

For example, if a court decided that the above car accident claim is worth $20,000, you would end up receiving $34,000 if there was no subrogation—the full amount from the lawsuit plus the amount the insurance company paid for your medical care.  Subrogation is a way of making sure everyone is paid their fair share, and doesn’t get paid twice.  It’s also a normal part of many personal injury claims.

When is subrogation common?

Subrogation can happen in any lawsuit where an insurance company pays part or all of the cost.  It can also happen if you receive money for your injury from a government agency.  But it is most common in certain cases:

• Workers compensation claims
• Faulty medical devices
• Defective or dangerous products
• Nursing home neglect or abuse
• Any case where insurance pays for the cost, but another party is found responsible

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