What is Subrogation in a Personal Injury Case?

subrogation calculations play a large role in personal injury cases

When personal insurance is involved, injury victims do not understand subrogation and its role in a personal injury case. Many injury victims do not understand how health insurance and personal auto insurance interact with a personal injury claim. Most times, clients would prefer not to involve their personal insurance at all.

Personal health insurance can be quite helpful and necessary to a personal injury claim. However, when health insurance or auto insurers pay bills with certain coverages, the insurance company will often seek to be paid back out of the settlement proceeds. We call the system by which the insurance carrier is paid back the “subrogation process.”

How does Subrogation work in a Personal Injury Case?

When an insurance company pays for something for which they were not the primary insurer, they will seek reimbursement from the primary insurer. The best illustration of this is with health insurance in an automobile accident.

When a Florida accident victim files a bodily injury claim with an insurance company, they are seeking to be paid for their damages. However, as they begin treating, their own personal health insurance might pay bills on their behalf. Whether this happens on purpose or by mistake is irrelevant. Once an insurance company pays for an insurance claim for which they are not the primary insurer, they will often assert a lien against the personal injury case.

The victim’s personal injury attorney has an ethical duty to ensure that whenever they file a claim, they are aware of all of the potential interests for which they can subrogate. Then, when a legal action comes to a close, the personal injury lawyer can ensure reimbursement of the proper parties.

In essence, in a personal injury case the at-fault party is the responsible party for payment of damages. When an insurance company pays claims for which the at-fault party should have paid (and eventually will pay), the insurance company simply seeks reimbursement for the bills the insurance company paid.

subrogation in a personal injury case
Insurance subrogation rules often feel as though they’re written in another language.

Who has a Right of Subrogation in a Florida Personal Injury Case?

The most common liens a Florida personal injury law firm must be on the lookout for are Medicare liens. The federal government protects Medicare liens. They also often require the most scrutiny. However, all forms of health insurance will seek subrogation. 

Many of these health insurers will seek reimbursement via a third-party administrator. These are companies that specialize in seeking reimbursement on behalf of large insurance companies. Essentially, subrogation has become big business for insurance companies.

Additionally, state Medicaid plans (like the one we have in Florida) can seek subrogation in personal injury actions. 

Lastly, some forms of automobile insurance can seek subrogation. The most common example of this in Florida is with Med Pay. Often, people will purchase Med Pay coverage on their auto insurance policies. 

Med Pay coverage pays an insured’s medical bills after PIP has exhausted. However, when your own personal auto insurance pays bills with Med Pay, they will seek reimbursement from the at-fault party (or from your settlement) when the case settles. 

The only way to avoid paying back the insurance company in this situation is to seek a waiver of subrogation. The Med Pay insurer will typically only agree to waive subrogation when the at-fault party’s insurance company has agreed to pay out their entire bodily injury policy limit.

The Upside of Subrogation

The bright side of health insurance subrogation is that health insurance will often pay far less for treatment than medical providers expect personal injury victims to pay out of pocket. Having health insurance can save people quite a bit of money in a personal injury case. 

The problem is that an attorney that doesn’t focus on personal injury law can easily miss a subrogation lien. When an attorney misses a lien, they put their client’s entire settlement in jeopardy. Injury victims run the risk of finding out they still owe money long after their injury claim has closed when they select an attorney that does not specialize in personal injury law.

Hire Knapp Accident & Injury Law

At Knapp Accident & Injury Law, we only handle personal injury cases. We do not practice any other sort of law. That is because we know the zeal and enthusiasm it takes to handle your personal injury case properly. We are dedicated to getting you the maximum compensation for your injuries.

If you or someone you love has been injured in a car accident or slip and fall, call us at (813) 568-3724. We are available at all hours to give you a free consultation and to help guide you through your recovery.

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