A car accident can range from minor to severe. Individuals who have been involved in car accidents often become extremely fearful and anxious about their future. The main focus after a vehicle collision has occurred is repairing the vehicle that was damaged in the crash, receiving medical treatment, and filing an insurance claim. However, it may be important for victims to understand another legal process known as subrogation claims.
Subrogation is a common insurance practice after a car accident. This is when an insurance company is allowed to pursue reimbursement from the insurer of the individual who was potentially responsible for causing the accident. In addition, it is important to note that this process may sometimes affect an injured individual’s:
- Settlement
- Reimbursement obligations
- Overall claims process
Understanding how this insurance practice works after a car accident may help victims have peace of mind when dealing with the struggles and challenges of a collision.
What Is a Subrogation Claim?
A subrogation claim is a legal means that ultimately allows an insurance provider to seek compensation or reimbursement from the individuals who may be potentially accountable for causing the vehicle collision. An example of this is as follows.
If a driver were to run a red light and as a result crashes into your vehicle, your own insurance provider may be able to pay for the vehicle repairs under your coverage instead of waiting for the at-fault driver’s insurance to finalize its investigation. After that has occurred, your insurance provider may seek compensation from the at-fault driver’s insurer. This is often done through subrogation.
The overall goal of this process is to grant financial accountability to the individuals who caused the accident and who were said to be legally responsible for the harm and damage that had occurred.
When Does Subrogation Usually Occur?
The process of subrogation often occurs in the following instances.
- Motor vehicle accidents
- Motorcycle collisions
- Truck accidents
- Property damage claims
- Fire losses
- Water damage claims
- Specific medical insurance payments
- Uninsured and underinsured motorist claims
- Commercial insurance losses
In addition, it is important to note that subrogation is not restricted to automobile insurance. Individuals should understand that multiple types of insurance providers may pursue subrogation in instances when another individual or business is said to be legally responsible for certain harm or damage.
How the Subrogation Process Works
Although every insurance claim is different, the process usually follows several steps.
1. Your Insurance Company Pays Covered Benefits
If your policy contains applicable coverage, your insurer may pay for the following.
- Vehicle repairs
- Property damage
- Medical expenses
- Rental vehicle costs
- Other covered losses
These payments are made according to your policy terms and appropriate deductibles.
2. Investigation of Liability
Your insurer investigates the accident by reviewing the following.
- Police reports
- Witness statements
- Photographs
- Vehicle damage
- Medical records
- Accident reconstruction evidence when available
The investigation helps determine whether another party may be held legally responsible for the loss.
3. Demand for Reimbursement
If your insurer determines another party was responsible, it may submit a reimbursement demand to the at-fault party's insurance company.
The insurers may negotiate repayment based on available evidence, applicable insurance policies, and California law.
4. Recovery of Funds
If reimbursement is received, the insurer recovers some or all of the money previously paid under your policy.
In many situations, your deductible may also be reimbursed if your insurer successfully recovers funds, although reimbursement is not automatic and depends on the circumstances of the claim and the amount recovered.
Can Health Insurance Companies Assert Subrogation Rights?
If your health insurance pays medical expenses related to an accident caused by another party, the insurer may have contractual or legal rights to seek reimbursement if those medical expenses are later recovered through a settlement.
California law contains various rules governing reimbursement rights, and those rules may differ depending on the type of health plan involved, including private insurance, ERISA plans, Medicare, or Medi-Cal.
What Happens to Your Deductible?
Many policyholders wonder whether they can recover the deductible they paid. If your insurer successfully recovers money through subrogation, it may reimburse some or all of your deductible, depending on:
- The percentage of recovery
- Comparative fault findings
- Insurance policy provisions
- Settlement terms
Recovery of a deductible is not guaranteed, particularly if liability is disputed or only partial reimbursement is obtained.
Can You Waive Subrogation?
Certain contracts include waivers of subrogation, which limit an insurer's ability to pursue reimbursement after a covered loss. Waivers are more common in:
- Commercial construction contracts
- Property leases
- Business agreements
- Certain commercial insurance policies
These provisions should be reviewed carefully because they may affect the parties' rights following a loss.
California's Comparative Negligence Rules
California follows a pure comparative negligence system. This means more than one party may share responsibility for an accident. If liability is divided among multiple parties, subrogation recovery may also be adjusted based on each party's percentage of fault.
Insurance companies often evaluate the following before determining how much reimbursement may be appropriate.
- Traffic laws
- Driver conduct
- Physical evidence
- Witness testimony
- Expert opinions
Why Subrogation Can Delay Claim Resolution
While many subrogation claims are resolved efficiently, others may take months if insurers disagree regarding:
- Fault
- Coverage issues
- The amount of damages
- Policy limits
- Available evidence
Conflicts between insurance companies do not necessarily prevent an injured person from pursuing a separate injury claim, but they can sometimes affect the timing of reimbursement or deductible recovery.
What Should You Do During the Subrogation Process?
Although insurers generally handle subrogation directly, policyholders can help protect their interests by:
- Keeping copies of accident reports
- Saving repair estimates and invoices
- Maintaining medical records
- Promptly responding to requests from insurers
- Informing insurers about any settlement discussions
- Reviewing reimbursement requests before agreeing to repayment
Legal Guidance
After a car accident, it may be beneficial to seek legal guidance and support to better understand your specific case moving forward. Oftentimes, topics such as subrogation may be challenging and complicated for victims to understand, especially when they are going through an already difficult time in their lives. Oftentimes, the process of subrogation is standard, but can become more challenging when multiple of the following individuals or questions are involved.
- Insurance carriers
- Healthcare providers and professionals
- Questions about liability
Victims who have suffered injuries or harm after a vehicle collision in California may benefit from understanding how the process of subrogation may ultimately influence the following.
- Property damage payments
- Medical expense reimbursement
- Deductibles
- Settlement distributions
As a result, seeking legal guidance can help individuals who may have questions after a car accident better understand their rights and responsibilities moving forward.
How KAASS LAW Can Help
After a motor vehicle accident, victims are often left feeling anxious and unsure about their future. KAASS LAW is determined to help victims better understand their rights when dealing with the aftermath of a car accident. Our legal team can review the facts of your case, speak with insurance companies, preserve important evidence, and help victims understand the entirety of their personal injury claims moving forward.
KAASS LAW also understands that every case is different from each other. Our personal injury attorneys may explain important California laws to victims who are suffering from the aftermath of a car accident. This can be extremely beneficial to those who are going through a difficult time. KAASS LAW will make each individual feel supported and cared for to ensure they get the most out of their experience. If you or a loved one has been involved in a motor vehicle collision, seeking legal guidance may help you move forward with peace of mind. Call KAASS LAW today for a confidential consultation.