If you are in a car accident, “subrogation” is a term you need to become familiar with.
Because a subrogation action by your insurance company can impact your claim Subrogation is not a term that many people hear about. That’s because it is generally a matter that is between insurance companies.
So let’s see what it is and why it’s important.
What is Subrogation?
Subrogation is one of the ways in which car insurance companies recover money they have paid out in claims to drivers that they have insured.
Subrogation is the act of one party claiming legal rights of another that it has reimbursed for losses. Subrogation usually occurs in personal injury or casualty cases where one insurance company pays its insured damages and then brings its own claim against other parties or their insurance companies who caused or contributed to the loss, for reimbursement.
To make this clearer, let’s say you are in a car accident. Generally, you will submit a claim to your insurance company for the damages you incurred (medical bills, damage to your car) related to that accident. Your insurance company will conduct an investigation of the accident, and based on its conclusions, will reimburse you some amount for your damages. Let’s say that your insurance company determines that that accident was entirely the fault of the other driver, so it pays all of your expenses. Your insurance company will then seek reimbursement for what it paid to you from the other driver’s carrier. Your insurer is “subrogated” to the rights of your policy and can “step into your shoes,” which means that your insurance company can recover what it paid to you, its insured, from the other insurance carrier.
Why is Subrogation Important to You?
You may be wondering why subrogation is important to the consumer if it’s just a matter of reimbursement that occurs between insurance companies. There are two main reasons why understanding how subrogation works is important:
- If your insurance company decides to pursue subrogation to recover its costs, they are required to try to recover the costs of your deductible as part of their subrogation claim. If they recover the costs of your deductible, they are required to refund that money to you.
- If your insurance company is not able to recover the money it paid directly from the other company, it may have a lien on your settlement. There may be issues to attack the validity of the lien. If you find yourself in this situation, you should have legal counsel assisting you in the matter.
- While it is rare, a subrogation claims might possibly limit your ability to make agreements with third parties regarding liability. Your insurance policy will very likely require you to cooperate with any subrogation attempts they make. This means that you may not be allowed to sign waivers that release the other driver from responsibility.
To fully understand subrogation and how it impacts you, you should discuss it with a personal injury attorney.
Talk to an Attorney.
If you have been in an accident, consult a personal injury attorney about your rights. We have offices in Salem, Medford, Bend, Portland, Eugene Albany, Grants Pass, Klamath Falls, and several other cities in Oregon. We also have offices in Vancouver and Tri-Cities in Washington. You can call us toll free at: 1-800-682.9568.