What is Subrogation?

When you’re injured in a car accident, you can obtain comepnsation for your injuries. If someone else is to blame, you can get money from their insurance company. However, sometimes an insurance claim can remain unresolved for a lengthy period of time. You need money, so you pay your deductible and your insurance company steps in and covers the rest of your costs.

The accident wasn’t your fault, so your insurance company will want to be reimbursed for the money it paid to cover the costs of your injuries. Your car insurance policy probably has a subrogation clause built in. Subrogation can allow your insurance company to recover the money it paid after your accident. During the process, your insurer may even be able to recover your deductible and out-of-pocket expenses.

What is Subrogation?

Subrogation refers to an insurance company’s right to “legally pursue a third party that caused an insurance loss to the insured.” In other words, subrogation allows your insurance company to seek reimbursement for money it paid to cover your accident-related costs. Without subrogation, your insurance company would not have the right to file a claim against a third party.

Example: Driver A and Driver B are involved in an accident. Driver A caused the accident but denies responsibility. Driver B needs money now, so they decide to pay their deductible and have their insurance company cover the remaining costs. Driver B’s insurance company can file a claim against Driver A’s insurance company to recover the amounts they paid as well as Driver B’s out-of-pocket costs.

Can My Insurance Company Subrogate My Claim If I Share Fault?

Yes. Your insurance company can still be reimbursed for benefits paid after an accident even if you are partly responsible. However, your insurer may not be able to recover all of the benefits it paid. Instead, it will be able to recoup a percentage of its costs.

The amount that your insurance company can recover will depend on how much of the accident was your fault. If you were 50 percent responsible for the accident, your insurer would be able to recover 50 percent of the money it paid on your behalf.

Can I Still Get My Deductible Back?

Yes. Your insurance company can still recover the deductible and out-of-pocket costs you spent after your accident. However, you will only get a fraction of what you paid. If you had a $5,000 deductible, and you were 50 percent at fault for your accident, your insurance company will only reimburse you with $2,500.

The Other Driver Didn’t Have Insurance. Can My Insurance Company Still File a Subrogation Claim?

Yes. Subrogation doesn’t necessarily mean that your insurance company has to seek reimbursement from another insurance company. Your insurer can demand compensation from any third party that contributed to your Los Angeles accident. If the other driver wasn’t insured, your insurance company could file a claim against the driver themselves.

Do I Have to Be Told About Subrogation?

Yes. Your insurance company always has to notify you whenever it decides to subrogate a claim. This lets you know that your insurer is stepping into your shoes and exercising rights that are typically reserved for you.

Notice of subrogation is required because you are also entitled to reimbursement for your deductible and other out-of-pocket costs.  If you didn’t know about the subrogation claim, you might not know that the insurance company recovered money that is rightfully yours.

Dealing with any personal injury claim after an accident can be challenging. This is particularly true when insurance companies are involved. You are much more likely to recover the compensation you deserve when you let an attorney handle your case. Call the experienced legal team at Glotzer & Leib, LLP to schedule a free case assessment today.