Many accidents require victims to receive immediate medical care. Most patients use some form of insurance to help cover their upfront medical costs, such as health insurance or automobile insurance. If an investigation of the accident later finds that the insurance company that paid for the victim’s medical care is not legally responsible (liable) for the accident, the insurer can submit a subrogation claim to seek reimbursement for what it paid.
What Is Insurance Subrogation?
Through the civil justice system, a victim can recover compensation to cover medical costs and become whole again, but he or she cannot profit off of an accident. A victim cannot have his or her medical bills paid by an insurance company and then receive a settlement award from the defendant for the same expenses. The process that prevents this double recovery is subrogation.
Subrogation means to stand in the place of another party. Insurance subrogation allows an insurance company to receive reimbursement for what it paid for an accident victim’s medical expenses while it was standing in for the party that was actually liable. An insurer can file a subrogation claim either directly with the liable party’s insurance carrier or – if the victim is pursuing a settlement through a personal injury lawsuit – against the plaintiff’s settlement.
Will a Subrogation Claim Affect Your Settlement Amount?
Yes and no. While a subrogation claim will technically affect the amount of your settlement by giving a portion of the award to the insurance company that paid for your medical expenses, since this money was never yours to begin with, it will not diminish your personal financial recovery. Since the goal of a personal injury case is to make you whole again, you will receive an amount that is reasonable to repay you for the money that you actually spent on the accident, such as in property damage repairs.
If you did not pay out of pocket for your medical bills but relied on one of your insurance providers for coverage instead, you may not be eligible for financial compensation to pay for your medical expenses from a defendant. Instead, any compensation awarded for medical costs will go straight to the insurance company that footed the bill on your behalf. Any money paid to your insurer through a subrogation claim comes from the defendant’s insurance company, not your own wallet. Thus, while this is not money that you will receive, it is also not money that you lost.
What to Expect From the Subrogation Process
A subrogation claim in a personal injury lawsuit does not require much action or effort on your part as a plaintiff. Subrogation is a process that goes on between insurance companies to pay for your medical costs. Typically, a subrogation claim will be resolved without requiring your input. However, understanding this process and the surrounding laws in New Mexico can help you protect your rights and intervene, if necessary.
For instance, there are legal limitations on an insurance company’s right to subrogation. Insurers must file this type of claim by the state’s deadline (three years in New Mexico) for a valid stake. In addition, the state’s Doctrine of Equitable Apportionment reduces the amount reimbursed to an insurance company when this recovery represents only a portion of the victim’s actual damages. This means there are limits on how much money an insurance company can take from your settlement, according to the circumstances.
Do You Need a Lawyer for a Subrogation Claim?
You may need assistance from an attorney to fully understand the issues connected to subrogation during your personal injury lawsuit in Albuquerque. Your lawyer can negotiate the value of a subrogation claim, for example, to increase the overall amount that you receive in a settlement or judgment award. A lawyer will ensure the protection of your rights in all subrogation matters.