If you’ve been injured in an accident and your insurance company paid some or all of your medical bills, you may later hear the term subrogation. It’s a concept that plays a big role in many personal injury cases, even though it usually happens behind the scenes.
Subrogation gives an insurance company the right to get reimbursed for the money it paid out on your behalf. If you recover money from the at-fault party, your insurer might try to take back some of what it spent. This can impact how much compensation you actually receive at the end of your case.
How Subrogation Typically Works
Subrogation usually comes into play when your health insurer, car insurance company, or workers’ compensation carrier covers part of your injury-related costs after an accident. Later, if you file a personal injury claim and receive compensation from the person who caused your injuries, your insurance company may demand repayment.
For example, let’s say you are injured in a car accident and your health insurance pays $15,000 for your hospital stay. If you later receive a $100,000 settlement from the at-fault driver’s insurance company, your health insurer might file a subrogation claim to recover the $15,000 it paid.
States generally allow this in many situations, though the exact rules may depend on the terms of your insurance policy and the source of your settlement. Some government benefits, such as Medicare or Medicaid, also have the right to subrogation and may seek repayment when your case ends.
How Subrogation Affects Your Compensation
At first glance, it might feel frustrating to learn that a portion of your settlement may go to someone else. But in reality, subrogation exists to prevent “double recovery.” The idea is that you shouldn’t get paid twice for the same bills, once by your insurer and again through a personal injury claim.
Still, subrogation can reduce the amount of money you take home. That’s why it’s important to work with a personal injury attorney who understands how to manage and, when possible, negotiate subrogation claims. In many cases, insurers will accept less than the full amount if they know you had to hire a lawyer or spend money to win your case.
Sometimes, the amount an insurance company asks for can be reduced based on:
- How much effort was required to recover the settlement
- Whether you paid legal fees or litigation costs
- Whether the insurer has clear legal rights to repayment
- The size of your total recovery versus your total damages
Having a lawyer involved in this process can make a meaningful difference. It may be the reason you walk away with more money in your pocket after medical bills and legal costs are accounted for.
Can Subrogation Be Challenged?
Yes. While many insurance companies have a legal right to reimbursement, that right is not absolute.
You may be able to dispute a subrogation claim if it:
- Exceeds what the insurer actually paid
- Is not supported by your insurance policy
- Violates an applicable “made whole” doctrine in some circumstances
The made whole rule is a legal principle that can limit subrogation when your total recovery isn’t enough to cover all your losses. Simply put, it states that you should be fully compensated before your insurer takes a piece of the settlement. However, this rule doesn’t apply in every case and can sometimes be waived by contract.
Every situation is different, so it’s important to let an experienced personal injury attorney review your case and any subrogation claims before money changes hands.
Why Subrogation Shouldn’t Be Handled Alone
Dealing with subrogation issues on your own can be challenging. Insurance companies know how the system works and will likely be aggressive in asserting their rights. Without legal help, you may give back more than you have to.
A skilled attorney can:
- Review your insurance policy and explain your rights
- Negotiate with your insurer to reduce their claim
- Ensure your settlement terms protect your interests
- Help you keep more of what you recover in your case
While subrogation may seem like a technical detail, it can have a major impact on your personal injury settlement. Failing to address it correctly can lead to disputes, delays, or even legal claims after your case ends.
Contact Our Chicago Personal Injury Lawyers for a Free Consultation
Subrogation is one of those legal terms most people don’t think about until it directly affects them. However, once your case involves insurance payments, settlements, or liens, it becomes a key issue. If your insurer wants reimbursement, make sure you understand your rights and obligations before agreeing to anything.
The best way to handle subrogation is to bring it up early. An experienced Chicago personal injury attorney at Zayed Law Offices Personal Injury Attorneys will immediately spot these issues and take steps to protect your recovery. Contact us today to get started with a free consultation at (312) 726-1616.
