Subrogation Claims in a Personal Injury Case
Posted Friday, March 12, 2010 by Christopher L. Thayer
One of the more perplexing concepts that I need to explain to most personal injury clients is the concept of subrogation. Here is an explanation in a nutshell, in a typical personal injury action arising out of a motor vehicle collision, your medical expenses are paid through your own insurance company under what is known as your Personal Injury Protection (PIP) coverage. Under PIP coverage, your own insurance company pays for your medical bills (as long as they are “reasonable, related and necessary” to treat an injury or condition caused by the motor vehicle accident. This payment is made regardless of who is at fault for causing the collision.
Assuming there is a 3rd party at fault, you can (and usually should) pursue a claim for damages against the at fault party. A component of your damages that you are entitled to recover are your medical expenses – even though they may have already been paid by your PIP coverage. When/if you settle or receive an award against the at fault party, you will then need to deal with your PIP carrier’s subrogation claim that it will assert against your recovery.
Your PIP carrier is entitled to this claim based on the language in your auto insurance policy. You know, the one you have probably never read, right? There are also equitable principles that allow your insurance company to seek reimbursement. The theory is that your insurance company has paid medical expenses that were incurred due to the fault of another and if you recover any money from the at fault party, your insurance company will want to seek reimbursement to the extent your recovery includes compensation for medical expenses incurred.
Many clients find this concept frustrating. Why are they having to pay some of their money to their own insurance company? Why have they been paying premiums all these years if this is how the insurance company is going to treat them?
Well, the good news is that there are some exceptions and some Washington case law that helps personal injury clients in this situation, especially ones who have hired an attorney. I will come back with a follow up blog post on these tidbits in the next few weeks.
For more information, please contact Christopher Thayer at 206-805-1494.