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What Subrogation of Insurance Claims Means For You

You may have heard the term "subrogation" in connection with an insurance claim. This term is often misunderstood by personal injury victims and this confusion can lead to problems when insurance companies suddenly demand a portion of a jury award or settlement. What does subrogation mean and how does it affect you if you are the recipient of money from a lawsuit?

What Is Subrogation?

Simply put subrogation is the process by which an insurance company pursues recovery from a responsible party for a claim it has already paid. Subrogation is most often seen in auto accidents, when the victim's insurance company may initially pay for his or her medical and property damage costs but then pursue payment from the at-fault party's company. However, if the insurance company is unsuccessful in securing payment, it is possible that the company may try to attach any personal injury award the victim receives.

Can An Insurance Company or Hospital Take My Personal Injury Settlement?

How successful insurance companies, hospitals and others may be in taking part of your settlement depends on several factors. However, it is very important to understand the methods of attack these companies may use in order to be prepared to fight for your rights.

If it was simply a matter of a dollar-for-dollar reimbursement of money the insurance company had already paid on your behalf, most people would not have a problem with subrogation. However, this is not always the case. HMOs and health insurers have placed deep discounts on the money reimbursed to hospitals and doctors, leading healthcare providers to pursue the amounts they have discounted in many personal injury cases.

As an example, suppose that the victim of a car crash visits a hospital emergency room and receives treatment. The total bill is $5,000. However, the victim's insurance company and the hospital agree to a reimbursement rate of $2,000. The insurance company pays this amount. When it comes time for the victim to recover money under a personal injury settlement, the victim lists $2,000 in medical costs; however, the hospital may try to collect the $3,000 it originally charged and discounted.

This strategy, if successful, could significantly change the amount of money you receive in a personal injury settlement. If you have been the victim of any type of accident, it is very important to have the help of an attorney to help you understand the way insurance companies operate. Contact the attorneys at Bernstein & Poisson in Las Vegas for more information.