Subrogation

What is subrogation?      

            Subrogation is a fancy legal term for getting paid back out of money someone gets for an injury.  What this means is that when an insurance company pays for some of the costs caused by an accident, such as medical bills, that insurance company often has a right to get its money back, or be “subrogated”, to a portion of the amount received in the settlement by the injured party. 

            The way this works is that a person who has been injured in an accident caused by someone else’s fault is entitled to recover “damages” which consist of the several types of losses caused by the accident.  These include lost earnings, compensation for pain and suffering and the medical bills.  When the medical bills have been paid out of health insurance,  whoever pays those bills will usually be entitled to be paid back when the injured person settles the case.  It is as though the health insurance company (or Medicare or MaineCare) owns that part of the claim which is for medical bills they already paid.

            Another common application of the concept of subrogation is where there is “med pay” insurance.  In this case the injured person’s own car insurer has to pay the injured person, up to the amount of the med pay limit, toward medical bills as they are incurred.  The insurance company is subrogated to get its money back when the injury claim is settled.  Actually, in the case of med pay, less than the full amount needs to be paid back, but that is because of special rules for med pay which I will cover in another blog.

            To get answers to your questions about personal injury claims, get my free book at http://www.lowrylaw.com/reports/the-big-secrets-about-maine-injury-claims-what-no-one-is-telling-you.cfm.