You may have heard the term “subrogation” before. But what is it, and how will it affect your personal injury case?
Subrogation is money that injured Iowans have to pay back after a settlement or trial win. If a victim reaches a settlement with the person who caused their injury, or the victim wins at trial, subrogation is used by other companies to recover their money that they have paid on the victim’s behalf.
This means any insurance companies who paid your bills can take part of your Iowa personal injury settlement to get back what they paid out.
It’s important to know why subrogation happens. The person who injured you (or their insurance company) does not have to pay any medical bills, wages, or anything else until ordered to do so by a judge after a trial.
However, while you wait for trial, your medical bills could be piling up – and if you don’t pay them, your credit will suffer. You could also be missing work and not able to pay your bills. We tell our clients to submit their bills to their own health insurance company or their own auto insurance company, until their case is settled or they are done treating.
Once your case has been settled, though, your own insurance companies will want their money back. They expect you to get enough in your settlement to cover their interest as well.
Subrogation can apply to:
Any subrogation liens will come out of your settlement amount. This is critical to remember when you are settling your case. It is the reason we always tell our clients how much money will actually end up in their pocket before settling their Iowa personal injury claim.
You may believe you’re settling for a fair amount, but after subrogation, you could be left with very little for yourself. We don’t want our clients to have an unhappy surprise.
You may think that subrogation sounds like a cash grab by your insurance company, but your insurance companies are not liable for your injuries. The person who hurt you – and their insurance company – should ultimately be the ones paying your medical bills and lost wages.
If you are ready to settle your case, ask your attorney how much money you will go home with. Any experienced attorney can calculate how much subrogation costs will affect any personal injury settlement offer so you know exactly how much you’ll receive.
An experienced attorney can also negotiate subrogation liens with your insurance companies. They will try to work out an agreement with your health or auto insurance in order to put more money in your pocket.
If you have further questions about subrogation, give our office a call at 1-800-433-0283.
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