What is Subrogation?

Subrogation refers to the right of one party to bring suit in the name of, or in the place of, another for the purpose of getting reimbursed for benefits paid to that person.  The most common situation where subrogation arises is with insurance.  For example, let’s assume you are involved in a car wreck that was someone else’s fault and your health insurance company paid for your personal injury.  Your health insurance company would have a right to subrogate against the other driver.  That means your insurance company can actually pursue their own claim or lawsuit against the at-fault party or their insurance company for reimbursement of the benefits paid to you.  This would also apply to auto insurance.  In the previous example, if your auto insurance paid for the damage to your car, then they can seek reimbursement from the responsible party.

How Does Subrogation Work?

Subrogation allows the paying party to step into your shoes and seek reimbursement from the responsible party.  So, just like you can sue for your damages, your insurance company can subrogate for the benefits they paid.  They can do anything that you can legally do to get restitution.  The insurance company can pursue their own claim and even file a lawsuit against the responsible party.  If they choose to file a lawsuit, the suit can be brought in the insurance company’s name or in your name.  You also have the contractual duty to cooperate with your insurance company’s efforts to seek subrogation.  This is because your duty to cooperate was a condition of the benefits being paid on your behalf.  If you don’t cooperate, then you could be held responsible for the amounts paid.

How Does Subrogation Affect Your Personal Injury Case?

If insurance benefits were paid on your behalf, then you must account for subrogation in the event you collect any money on your case.  Taking the example above, if you settle your car accident case and sign a release, then you have effectively prejudiced your health insurance company’s right to subrogate against the responsible party.  Likewise, you may have legally assumed the responsibility for paying the subrogation claim out of your settlement proceeds.

Issues of subrogation can become complicated and riddled with many surprises: both good and bad.  That is  because the rules are constantly evolving and changing in this area of the law.  This article is only intended to explain the general principals of subrogation.  There are many other exceptions and special rules that may apply to any given situation.  For instance, if your auto insurance company paid Personal Injury Protection (PIP) benefits, Texas law expressly prohibits any right of subrogation for PIP.  On the other hand, if your auto insurance company paid Med-Pay benefits, then there be a right of subrogation.

Likewise, you should retain an attorney experienced in personal injury to handle your case.  Otherwise, you could find yourself in a position you never bargained for.

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