What is subrogation and how does it apply to me?

If you experienced an injury due to an accident, you have probably encountered a bevy of legal and insurance terms that you have had to learn about. One of these is subrogation. Subrogation, or the right of an insurance company to make a third party pay for an insurance loss, comes into play in many accidents. In this post, we will delve deeper into the meaning of subrogation to help you understand how it may apply to your situation.

Subrogation: What to know

Every aspect of insurance law, from homeowner’s insurance to health insurance to auto insurance, has subrogation laws. Subrogation refers to the right of an insurance company to step into your shoes, so to speak, and seek compensation from the person or party who caused your accident.

For example, let’s say that you had a car accident. Your health insurance and auto insurance will cover some, if not all, of your expenses. However, the insurance companies may decide to seek reimbursement from the driver, trucking company or other party that caused the accident. If you file a lawsuit against the perpetrator and receive a settlement or a verdict, subrogation allows your insurance provider to seek a portion of the money.

How will this affect me?

Generally, your insurance company compensates you directly for your expenses. In other situations, it may pay the hospital, autobody shop or other party directly. But a representative from your insurance company may contact you to learn more about your accident. They want to determine whether they can pursue legal action against the perpetrator to earn back some of their money.

If you receive a settlement or an award from a personal injury action, you may not get to keep the entire amount. Your insurance company may try to take some of it to pay back their expenses. An experienced attorney can help you keep as much of your settlement or award as possible.