Subrogation And Your Insurance Claim
What is Subrogation?
Subrogation is really just fancy insurance terminology meaning, in so many words, that being obligated to an insurance provider’s policies bars you from pursuing settlements to claims outside of the insurer’s own policies in recovering damages from the at-fault party to an accident. The insurance company therefore “stands in your place” after an accident, to obtain reimbursement from the at-fault person’s insurer to in turn cover the cost of your claims which they would have paid out to you.
When you affix your signature to your insurance policy schedule, there is a high likelihood that within the terms is a section of your policy warning you against seeking compensatory rewards from an individual motorist (or motorists) outside of the scope of the insurance company’s disbursing payment based on the outcome of a civil personal injury case.
Subrogation vs. Civil Trial
Of all different types of civil cases that wind their way through the various courts around the country, personal injury cases stemming from auto accidents, for which a personal injury attorney is needed, stand out among the most frequent examples in our legal system of subrogation gone awry. It is important to note, however, that subrogation is not actually quite as bad as it sounds, and nor is it exclusive to cases of auto accidents alone.
To begin, an accident rooted in a finding of negligence must first occur to trigger insurance claims proceedings—even before a civil trial—in order to further trigger issues regarding subrogation. After the accident occurs and police reports are filed, those involved file insurance claims with their insurance providers, which will initiate the payout process for the accident and cover injury, economic, and non-economic damages. Supporting your claim will be, of course, the usual evidentiary sources: personal and/or witness statements, photographs of the accident illustrating damage to the vehicle, and police accident reports. After these are submitted, an insurance company will “process” the claims, that is to say, determine who is at fault—and thus determine an associated payment coverage for the accident. Often times, this proceeds without much issue, but where those issues arise are just as often rooted in the actions of the participants.
Avoiding Subrogation Penalties!
If and when the victim of a car accident seeks a settlement or a compensatory award outside of those processes specifically identified in their insurance policies—this applies to both the victim and the tortfeasor— this individual is said to have violated the tenets of subrogation to the insurer, prohibiting an insured individual from seeking exactly the kind of outside settlement described above. To do so risks minimizing the impact of your insurance claim coverages as it relates to personal injury and the associated economic and non-economic damages. Further still, an insurer may altogether penalize you financially as an insured policyholder.
The exclusive nature of claiming and obtaining compensatory insurance damages is significant for a few reasons. An insurance claim against the tortfeasor and a civil trial may occur simultaneously, or a civil trial may occur after the insurance proceedings have been finalized. In certain states like California, the dollar amount received from an insurance claim has no bearing on the civil trial’s compensatory outcome, which is not capped under state law (unless in a medical malpractice suit, capped at $250,000). Regardless of the amount of money received in damages through insurance claims, a jury may still award a victim that amount and more— essentially leading to double compensation.
In yet other states, like New York whose statutes provide for the so-called seat belt defense, your civil award may be mitigated and ultimately lessened if you were not wearing a seat belt at the time of your crash. New York and approximately 15 other jurisdictions rationalize that while the accident itself may have been caused by the respondent’s negligence, the actual injury for which damages are sought is often exacerbated by the “second collision” which occurs within the plaintiff’s vehicle as a result of his/her not wearing a seat belt. Here, we examine how additional or tangential factors beyond actual fault in causing the physical accident come into play in the courtroom when a plaintiff makes their case for damages.
Subrogation in Conclusion
As a motorist, many factors may come to mind when contemplating the idea of a “safe driver”. There are many considerations to the term safe: looking both ways, using a seat belt, and driving the speed limit. However, much of that safety is also rooted in how prepared and knowledgeable you are about your insurance policy and the legal effect of subrogation terms therein. As stated above, failure to adhere to an insurance provider’s subrogation efforts or policies could adversely impact your ability to obtain compensatory awards and draw out the claims paperwork process. What is most essential throughout the post-injury phase of the accident is to answer all questions truthfully; provide as much relevant evidence as possible; and ensure your claims are adequately addressed by avoiding settlements or outside-of-policy arrangements that could nullify your coverages—or make them especially difficult to obtain. Finding adequate counsel well-versed in your state’s actuarial and subrogation laws is crucial to an as-smooth-as-possible insurance claim process and civil trial.