One of the more obscure legal terms that gets tossed around when a motorcycle accident claim is filed with the help of a motorcycle injury attorney (and in other personal injury cases as well) is “subrogation”.
What is Subrogration?
“Subrogation,” is a term that – while common in my profession and in fields such as insurance – is virtually unheard of outside of courtrooms and law firms.
The most common definition is the one used in the insurance profession:
“Subrogation is the right for an insurer to pursue a responsible party whom caused a loss to their insured. This is done as a means of recovering at least part of the claim paid to you for the loss.”
Why It Matters to You
It is a great example of why you will want to hire a lawyer to help with your claim.
To break that down a bit for easier consumption, subrogation means that one person or party stands in for another.
For example, if you have been injured in a motorcycle accident that wasn’t your fault, and it involved another vehicle, your insurance company will generally take 2 steps:
- Pay the claim in order to cover your damages and injuries, or
- Seek to recover at least some of the the money they paid from the at-fault parties in order to defray their costs
There is usually an investigation at this point to determine who is at fault. Subrogation allows the insured biker who files the claim to receive a payout from their insurance company, without waiting for the results of the often long and drawn out investigation.
The insurer will generally seek to recover those costs from the at-fault party later. The issue is that this can eat into your award, an idea I’ll come back to momentarily.
Subrogation and Settlements
At this point you’re probably wondering why you should care.
Here it is: as one of the most experienced Pennsylvania motorcycle attorneys handling settlements, I can tell you that subrogation can have a significant effect on the amount of your recovery.
Even after we are successful in securing you a favorable award, your insurer is still allowed to attempt to recover some of their costs from these proceeds.
My job as your attorney is to either head this off before it becomes an issue, or to negotiate on your behalf to make sure the amount of these payments are reasonable, and have a minimal impact on how much of the recovery ends up in your pocket.
Real World Example
You have been injured in a motorcycle accident through no fault of your own.
You hire me as your motorcycle attorney and we have forced the insurance company to settle your claim in an amount that was much larger than they initially offered you.
Great, you’ve won! You may have a long road to recovery left to travel, but in time you will be okay, because your motorcycle accident medical bills have been paid, and your bike is restored.
But then you get a notice from your health insurance company. They want you to pay them a substantial sum in order to reimburse them for the accident-related medical bills they paid on your behalf.
Adding insult to injury, the relatively new concept of “Subrogation” enters into the picture. Your own health insurance company who paid your medical bills, after the case settles presents a claim in an attempt to recover the money they have paid out, even though you have paid them premiums for many years.
Needless to say as your motorcycle injury attorney I don’t take kindly to these claims, and before even discussing any rights of reimbursement the company may have, we force them to prove to us that they even have such a right.
Normally this is done by asking them to provide us with a complete copy of your health insurance policy along with proof of either self-funding or partial self-funding by your company along with proof of ERISA Qualification and/or HMO status.
Believe it or not many companies will claim they have a contractual right to be reimbursed for payout of a motorcycle accident claim – but when motorcycle personal injury attorneys challenge them to prove it, they fold up their tent and walk away!
If you do not have a motorcycle attorney, you may be suckered into paying these subrogation claims.
I handle motorcycle accident cases in Pennsylvania for the plaintiff, which means I’m not considered a defense attorney. However, in these situations, I do act in my clients’ defense. It’s just another way I provide protection for my valued clients.
Waiving subrogation rights
As I always tell my clients, friends, and anyone else who will listen, don’t sign a settlement with the other driver’s insurance provider until you call and speak with a qualified lawyer.
They will slip all sorts of fine print into the settlement, including a “waiver of subrogation,” clause that is intended to prevent your insurance company from seeking reimbursement from your award.
That means that if you sign, your insurance company can refuse to pay your claim because they are now prevented by your own signature from seeking reimbursement from the other driver’s provider.
To make a long story short (I know – too late for that), you’ll have to wait until the investigation to see any money for medical expenses, property damage, etc., if you see any recovery at all. In the meantime, every cent of your expenses will have to be covered out of your own pocket, even if you were not in any way at fault.
Get a free evaluation of your legal claim
Obviously subrogation issues can become complex, with a big potential for unforeseen consequences, even in the case of a successful claim. That’s why it’s so important to hire a competent and tenacious motorcycle accident claim attorney to fight for your interests.
Have more questions or concerns about how subrogation might affect your case? Give Pennsylvania motorcycle accident lawyer Lee Gaber, Esquire a call at 1-888-292-5352, to set up your free consultation.