What is Insurance Subrogation?

Subrogation is a term that represents the insurance company’s right to be reimbursed for any money they paid out on your behalf. Subrogation means to step in another’s shoes. In a classic example, if you have health insurance and are injured in an automobile accident. You are treated at the emergency room, and you need surgery. The hospital will bill your insurance and they will pay the hospital for the surgery. Now that your insurance company is out of pocket to restore your health they will likely bill you for any uncovered amounts.

But since this accident was not your fault, and assuming you hire a qualified attorney to handle your case, you are likely to be awarded monetary damages for your injuries, lost wages and pain and suffering. By law your insurance company has the right to subrogation – or to step in your shoes and recover the money they’re owed from the person who injured you. It’s only fair that your insurance company be reimbursed for the costs they incurred at the hands of some third party.

Subrogation is a tricky business and it takes a skilled attorney to both maximize your monetary recovery and satisfy your insurance’s subrogation interests. Not all insurance is created equal. Certain insurers require that they be paid back dollar for dollar what they spent on your care. These are usually self-funded ERISA plans and MedPay provisions in your insurance contract. For example, if you pay the extra fee to add MedPay to your auto policy and decide to use the 2,000-3,000 they offer for out of pocket medical expenses – you’ll have to pay that back dollar for dollar.

It’s crucial that you hire an attorney who knows the ins and outs of insurance and how to negotiate on your behalf. If you’ve been injured through no fault of your own then you owe it yourself and your family to see what your options are.

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