Subrogation – Just The Facts

A person injured in an accident has the right to have their medical bills paid by their insurance, but not profit from it. That is subrogation in plain English.

Let’s look at an example from the world of insurance subrogation. Mary is injured in an automobile accident that was another drivers fault. Her insurance company pays $25,000 for treatment of her injuries. She sues the other driver and receives $50,000. Under federal laws regarding claim subrogation, she must repay her own insurance company the $25,000 it paid because another party was at fault. In other words, because of subrogation, the other party should have originally paid her medical bills, not her own insurance company.

Many people are not aware of this and become angry when a subrogation recovery company contacts them about details of an accident that may have occurred two years earlier. It is this company’s job to find those claims where another party was liable for someone’s injuries, and determine whether or not that other party paid any money for those injuries. The laws regarding this can vary by plan and are commonly referred to as erisa subrogation.

Many individuals involved in health insurance subrogation do not think this process is fair. However, when fully explained, the fairness of it becomes obvious. For example, let’s say your friend was injured by another person and you gave them $10,000 to cover their medical expenses. Later on, you discover your friend reached a settlement with this other person for $30,000, yet did not pay you back the $10,000 they gave you. Is that fair? No it is not. And that is why we have laws regarding insurance subrogation.

If you are contacted by a subrogation recovery company, it is in your best interest to give them the information they are requesting. They are not out to get you. Usually, they just want to know the details of the accident, if another party was involved and if you received any type of reimbursement from the other party. Their job is to find the facts and pass them along, not make your life miserable. If claim subrogation is involved, it’s often a matter between your insurance company and the other party’s, not between you and the subrogation recovery company.

Subrogation losses account for billions of dollars annually. Roughly 3 percent of what your insurance company pays out falls into the category of insurance subrogation, where someone else should have paid. For everyone, that means higher premiums. So if you are injured in an accident and receive a questionnaire about the details, take the time to fill it out. This is an important part of the subrogation process and ultimately will keep more money in your paycheck by keeping your health insurance premiums lower.

Subrogation Resources

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