Most personal injury claims involve an insurance company. In some cases your claim is against the insurance company themselves, demanding that they pay you the compensation you deserve. In other cases, however, your claim is against another party entirely—the person who harmed you, or their insurance company—and your own insurer does nothing but help pay the bills. In cases like this there will typically be some mention of subrogation.
Subrogation just means that one party stands in for another party in a legal claim. In this case, it’s your insurance company standing in to claim part of your financial recovery. They can do this if they have already paid some of your expenses—such as medical bills or car repairs. If so, they are entitled to recover the money they gave you out of the money you are awarded.
Here’s an example of how subrogation works:
- You are involved in a car accident with an uninsured driver. You are injured and experience months of severe pain.
- Fortunately, you happen to carry uninsured motorist insurance, so your own insurance company steps in. They pay $14,000 for your medical bills.
- 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.
- 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. But the other party can only do that if they’ve already helped you pay for your injury. They aren’t stealing money that’s yours, they are “getting back” the money they paid in. If subrogation didn’t exist, you would essentially get paid twice—once from the insurance company and once from your lawsuit.
Take the car accident example above. A court decided that your claim is worth $20,000, but if there was no subrogation you would end up receiving $34,000—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
Have you been injured? John Foy & Associates offers a free consultation with some of the most experienced and respected personal injury lawyers in Georgia. Fill out the form to your right or call us at 404-400-4000 to get your FREE consultation today.