The Concept Behind Insurance Subrogation

Subrogation has been defined as a situation in which one party stands in place of another. That is what happens at the conclusion of a personal injury case.

What happens during a subrogation claim?

During the course of that claim, the paying party, also known as the collateral source, enjoys a particular authority. That party has the authority to say that the collateral source has no more legal rights than the person that received the granted payment.

Personal injury lawyer in Sherwood Park know that subrogation could also put a collateral force at risk. Any legal defense that could be used against the insured and paid party could also get forced on the collateral source.

What happens when the party receiving money from the collateral source has filed a personal injury claim?

The paid party’s automobile insurance company fills the role of the collateral source. At the conclusion of a personal injury case, the auto insurance company must pay the claimant’s health insurance provider.

The money for that payment can come from one of 2 places. It might come from the settlement funds, or the funds granted by the court. Alternatively, it could come from the insurance company of the person that has been held responsible for the accident.

The health insurance provider deserves compensation for the payment made to its own policyholder. That payment was made as part of a personal injury claim. Utilization of the subrogation process is supposed to keep the injured party from getting paid more than once.

Other financial transactions that call for utilization of the subrogation process:

Workers’ compensation programs: The injured worker can get paid only once.
Medicare programs: The Medicare recipient gets paid only once, in order to cover the costs of a particular procedure.
Medical assistance programs
State assistance programs

Subrogation relies on the adequate sharing of information.

During a personal injury case, the injured party’s automobile insurance company should find it easy to get the name of the same party’s health insurance provider. By the same token, the injured party’s lawyer should have that same piece of information. Thus, it should be easy to hand money from the compensation to the health insurer.

On the other hand, the insurance company of the responsible party might not have the name of the plaintiff’s health insurance provider. As a result, it becomes more of a challenge to take some of the money in the intended compensation package, and to give that same money to the unidentified health insurer.

If all of those responsible for completing the planned subrogation do not have sufficient information, that same process (subrogation) does not proceed properly. In other words, it is possible that the injured party might get paid more than once for those damages.