After a personal injury case is settled, many clients are surprised to discover that their health insurance company is entitled to take a portion of the payout. People, especially those who are seriously injured in auto accidents, feel that this practice is simply unfair — but the reality is that your insurance carrier has a legal claim for reimbursement on the hospital and medical expenses made on your behalf. This is known as “subrogation,” which enables your insurance company to be indemnified for all medical costs covered after your accident.
While you are legally obligated to pay back your insurance company for the medical treatments your policy covered, a qualified personal injury lawyer can help you tackle this eventuality from the start by maximizing your monetary recovery.
Insurance subrogation
Whether your injuries were caused because of another’s party’s negligence, or you were partially to blame for your accident, your insurance company is responsible for covering your medical bills. This could include doctor’s visits, surgery, rehabilitation, prescription drugs and other care expenses. This safety net comes at a price – your monthly premiums and a binding contract that you signed when you acquired your policy.
When you purchased your health insurance policy, although you may not have been aware of it at the time, you agreed to a subrogation clause, which allows your insurance company to seek repayment from you for medical bills arising from an at fault third party. In other words, if you were injured by a negligent party and received a personal injury settlement that includes payment for medical expenses, you are obligated to reimburse your insurance company for any monies they advanced for your treatments.
In effect, your insurance company will always pay for your medical treatments according to the terms of your policy, but it also puts a lien on any future monies made available to cover the expenses. If your claim does not culminate in a settlement or court judgement, you (the policy holder) have no monetary obligations to your insurance company beyond your normal premiums.
Why do I have to pay back my insurance company?
Any monies received through a verdict or settlement will be based in part on your medical expenses. This type of legal recovery is based on liability, which means the party who caused your accident would be responsible for paying your medical expenses. If you do not reimburse your insurance for the expenses, you would be, in essence, compensated twice for your injuries.
Keep in mind that that the insurance company is only allowed to claim the actual amounts paid for your medical treatments, so even though a doctor may have billed for $2,000, your policy may have only paid $1,300 on the claim.
Importance of legal representation
In our experience as veteran personal injury attorneys in Los Angeles, many clients have little knowledge about subrogation liens, and the impact they can have on their financial recovery. If you’ve been in an accident and are filing a claim in Southern California, a skilled attorney can help you navigate insurance subrogation interests, while working hard to optimize the value of your case.
Protect your rights to fair compensation and contact the Salamati Law Firm for a free case evaluation. Our legal team focuses on litigation arising from car accidents, truck accidents and premises liability.
Additional Insurance Subrogation Resources:
- CMS.gov, Reimbursing Medicare: Medicare’s Demand Letter, https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Reimbursing-Medicare/Reimbursing-Medicare-.html
- California Department of Health Care Services, Personal Injury Program, http://www.dhcs.ca.gov/services/Pages/TPLRD_PersonalInjuryProgram.aspx
- CMS.gov, Coordination of Benefits & Recovery Overview, https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Overview.html
