Subrogation Explained

June 29, 2012

Auto Accidents

Understanding what subrogation is, along with its purposes, becomes crucial in an injury case.  Subrogation in literal terms means “One person or party stands in the place of another.” It is a device used by insurance companies and public benefit programs to recover any money that they may have paid out on your injury, should another person other than the injured be partly or wholly at fault.

A hypothetical scenario will demonstrate how subrogation works.  You get into a car accident and suffer bodily injury.  As such, you go to the emergency room for health care.  After that you follow up with your family doctor in order to re-evaluate any problems you may have had with the injury.  Generally, your health insurance company pays the bills for those services as they are supposed to.  If you were at fault for the accident that led to the injuries, then there is not anything that presents a problem with your insurance company having paid your bills.

The issue of subrogation appears when you are not at fault for your injuries.  Your health insurance or public health plan still pays your medical bills as they did above.  However, subrogation now becomes an issue.  This is where your insurance company will want to know if you are filing a legal claim against someone else to compensate you for your injuries.  If your claim is successful or there is a settlement, there will typically need to be a repayment to your insurance company for the health services that they paid for.  Example:  You get a $100,000 settlement or verdict from the at-fault party, but your insurance company has already paid $50,000 in medical bills for your treatment.  Your insurance company, whether private insurance or public assistance program, is now to be reimbursed for $50,000 they spent on your bills.

The theory behind subrogation is to prevent “double recovery” by an injured party.  The theory is based on the idea that no person should be able to recover damages from a third party that amount to a windfall, after their insurance paid for their medical care.  It is also supposed to keep insurance premiums as low as possible.

Public assistance programs such as Medicaid and Medicare are of special mention when considering subrogation issues.  Those programs are statutorily required to be placed on notice in writing, should you file a claim against an at-fault party for compensation.  This means that public assistance programs are automatically entitled to subrogation claims by law, and Ohio law requires that any funds that they distribute, which are recovered in a lawsuit or settlement, be reimbursed to them.  This also applies to veteran’s benefits, worker’s compensation, and state and federal benefits programs that provide health care benefits.

It is advisable to contact an experienced Ohio personal injury attorney at the law firm of Slater & Zurz, LLP for a free consultation by calling 1-800-297-9191 to make certain that you are adequately represented in order to insure compensation for injuries and other damages sustained during an accident.  You can also send us a blog message with any questions or concerns you have.

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About slaterzurz

Slater & Zurz LLP is an Ohio law firm of highly experienced and respected attorneys. Over the last 40 years, we have developed a reputation for getting positive results for clients. We've been trusted with handling over 20,000 personal injury cases and our clients have received more than $120,000,000.

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