Understanding Subrogation: How It Impacts Your Personal Injury Settlement

Subrogation allows one party, such as an insurance company, to step into the shoes of the injured person and seek reimbursement from the at-fault party. This o

ften comes into play after a personal injury case, where benefits have been paid, like health insurance covering medical bills following a car accident. If your health insurer pays your medical expenses, they have the right to pursue reimbursement from the responsible party, or their insurer, for the amount they covered.

Subrogation isn’t limited to health insurance. It can also occur with car insurance if your insurer pays for vehicle repairs and then seeks to recover that amount from the party at fault.

How Subrogation Works

Most insurance policies include a subrogation clause, giving the insurer the right to recover the money they’ve paid out. They can file a claim or even a lawsuit against the party responsible for the accident, and you’re required to cooperate with these efforts. If you fail to cooperate, you might end up responsible for the amounts paid by your insurance.

Subrogation’s Impact on Your Case

If benefits were paid on your behalf, subrogation comes into play when you receive compensation from a settlement. For example, if you settle a car accident case and release the at-fault party from liability, your health insurer may seek reimbursement from your settlement. Essentially, by settling, you may take on the obligation to pay the subrogation claim.

In Texas, Chapter 140 of the Civil Practice and Remedies Code was enacted to clarify and limit subrogation claims, especially concerning how much must be repaid from a settlement. Before this statute, health insurers often tried to recover more than they were entitled to, sometimes even attempting to recoup 100% of their payments, leaving little for the injured party.

Exceptions to Subrogation Laws

Unfortunately, Chapter 140 doesn’t apply to all insurance types. Exceptions include ERISA-governed plans, workers’ compensation, Medicare, and Medicaid. Additionally, Personal Injury Protection (PIP) benefits are protected from subrogation under Texas law, but Med-Pay benefits may be subject to it.

Subrogation claims are often negotiable, and in many cases, insurers may agree to reduce their claims based on the circumstances of your case. This is particularly important because without a settlement, they may not receive any payment at all. If you or someone you love has been injured as a result of someone else’s acts, contact an experienced attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-222-7211 or 1-800-870-9584 for your free consultation. The law firm of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner is the longest standing personal injury firm in Texas, and our attorneys are standing by to assist with your claim.