Understanding Insurance Subrogation After a Car Accident

After an auto accident, you’ll have a lot to think about. Getting your car repaired or replaced, being out of work, and paying medical bills—it will all weigh heavily on your mind. While these are all important considerations, there’s something else to keep in mind: insurance subrogation.

Those hurt in auto accidents must understand the effects of subrogation on any potential settlement. With the help you will receive by going to Millar Law Firm, you’ll learn more about subrogation and minimize its effects. Here, we will explain insurance subrogation and how it may change a claim.

Subrogation: What Is It?

When one party is substituted for another in the fulfillment of a duty or the payment of a debt, subrogation is said to occur. As far as auto insurance is concerned, subrogation allows insurers, not the at-fault party, to cover your losses. Then, the insurance company pursues the responsible party to recover what they’ve paid.

Subrogation Prevents Illicit Gains After an Accident

If someone is in an accident and the at-fault driver refuses to accept liability, it may be necessary to take the case to court. However, medical bills and lost wages won’t wait—and neither should a victim. Medical insurance typically kicks in, covering hospital bills and treatment costs, but that’s not always the end of the story.

In most accident cases, victims collect damages from responsible parties or their insurers. If a victim keeps the entire settlement amount, they’ve benefited from the accident, which is against the law. Subrogation rules allow insurers to collect their funds while putting victims back in the same position they were in before the accident.

Getting Timely Settlements and Care

Without the rules of subrogation, insurers would take much longer to settle auto accident claims. Carriers would be required to fully investigate each claim to confirm their duties and responsibilities. Under subrogation laws, companies can pay claims faster—and victims get the money they need to pay for their care.

A Reduced Cost of Coverage

Insurance subrogation also works to lower the cost of coverage. Without it, insurance carriers would likely pay more than once for the same claim. Therefore, the cost of doing business would increase, and those expenses would be passed on to policyholders in the form of higher premiums.

Subrogation Eligibility: Who Can Do It?

Anyone assuming financial responsibility for another person’s auto accident injuries has the right of subrogation. For these claims, parties such as health, auto, and worker’s compensation insurers, and government insurance companies such as Medicaid and Medicare may subrogate a claim and thereby recover what they’ve paid.

You Play a Key Role in Subrogation

Whether or not they realize it, victims are involved in insurance subrogation. For starters, a victim should never sign a waiver that absolves other parties of liability, as that can affect their insurer’s subrogation rights. It’s also important for accident victims to retain documents related to their treatment, medical costs, and settlement. Insurers must inform policyholders of their plans to subrogate a claim, and in many cases, they’re willing to negotiate the recovery amount.

Get the Subrogation Help and Personal Injury Advice You Need

Local injury attorneys know how insurance subrogation affects their clients’ recoveries, and that knowledge is just one reason to have legal representation after an auto accident. Our firm’s lawyers have the experience and skills to handle auto accident cases and the insurance settlements that come afterward. Contact us today to request a no-obligation consultation.