We help clients with personal injury claims and workers’ compensation claims, and while we have an easy time managing these two types of claims, sometimes payment obligations can get confusing when trying to navigate a complex personal injury case or a workers’ compensation claim that is filed incorrectly by an insurance company. In these instances, you may find that a subrogation interest is created alongside your claim, and you’ll want to be aware of this new obligation because it can affect your bottom line. In today’s blog, we take a closer look at subrogation interest during injury claims.
What Is Subrogation Interest?
To put it as simply as possible, subrogation interest essentially means that an insurance company has paid for an item or services, and it is later discovered that they were not responsible for paying that bill, and now they have a legal right to recoup those expenses. It’s better explained with a couple of examples:
Example #1 – You suffer major injuries in an automobile accident, exceeding the $20,000 limit your automobile insurance coverage provides for medical bills. You incur additional medical expenses, and your personal health insurance provider covers some of your outstanding medical bills. It later is determined that the other driver was at fault for the accident, and their insurance accepted responsibility for payment of your medical bills. Your personal healthcare insurance provider has now entered subrogation, as they are legally entitled to recoup the portion of the payment they made on services that the other driver’s insurance company is now responsible for.
Example #2 – You suffer an injury at work and get a medical examination. The doctor’s office ends up billing your personal health insurance provider. You end up winning a workers’ compensation claim, meaning your employer’s workers’ compensation insurer is responsible for making payments for expenses tied to your injury. Your personal healthcare insurance provider would have a subrogation interest in your claim, as they will want to be compensated for expenses they covered that have been deemed the responsibility of the workers’ compensation insurance provider.
A subrogation interest in your claim isn’t going to take money that’s actually owed to you out of your pocket, but you will want to be aware of their existence so that you don’t assume you’re getting a bigger paycheck than you actually do. For example, if the other driver’s insurance company offers to settle for $35,000, but that payment includes $10,000 to cover your personal automobile insurance subrogation interest in the matter, know that you would not be entitled to that full $35,000 amount.
Because you never paid the bill, you’re not out any money because of the subrogation interest, but any money that is part of a settlement that is earmarked for another party should be made clear. Your attorney can explain what you should expect to take home and if any insurance providers have a valid subrogation interest in your award. This also speaks to the importance of keeping detailed records of all expenses and medical bills that you receive during the process of your injury claim. This way all parties will have an easier time understanding payment obligations and subrogation interests.
If you want a professional by your side who can maximize your award and explain if any subrogation interests exist, reach out to the team at Hey Workers today at (844) 439-9675.
