While your Scottsdale personal injury claim, an insurance claim against the at-fault party’s insurance company, is being processed, you should take a moment to learn how a personal injury claim or lawsuit could be affected by insurance subrogation.

Subrogation Affects Scottsdale Personal Injury Insurance Claims

You were injured in an accident that was not your fault.  The other person’s insurance company rarely will pay your medical expenses as they are incurred. And, because Arizona does not recognize true third-party (“third-party” simply refers to someone else’s insurance company) bad faith rights against another person’s insurance company for treating you unfairly in its handling of a personal injury insurance claim, these personal injury insurance claims can take a substantial amount of time to resolve.

During this time, your health and/or auto insurance company pays for your medical treatments and other related first-party (“first-party” simply refers to your own insurance company) insurance benefits. But now there is a personal injury settlement against the person who was at fault in the accident. Will you be required to pay a portion of your personal injury settlement to your own insurance company?  It is not a simple question as it depends upon the type of first-party insurance benefits, but potentially yes.

Subrogation in very simple terms refers to an insurance company’s right of reimbursement for the money that it paid out to cover your (or your family member’s) medical treatment, losses, or other benefits due to the negligence of someone else. Reimbursement flows through the successful settlement of your personal injury insurance claim, which typically occurs long after your own insurance claims were processed.

Insurance Subrogation Claims Followed By Personal Injury Lawsuits

When you are injured, your health insurance or automobile medical payment benefit (“Medpay” and sometimes known as Personal Injury Protection “PIP” depending upon the area of the country) insurance covers the medical expenses incurred in treating your injuries. Your health insurer or medpay insurer may claim reimbursement should a personal injury lawsuit and settlement result against the defendant who was at-fault in causing the accident. Consequently, your health insurance company, usually through a debt collection company such as Ingenix, will notify the defendant and defendant’s insurer that it will assert a claim of subrogation or reimbursement against your settlement, award, or judgment.  And, in some cases, your own health or auto insurance company will record liens against you simply for utilizing the insurance coverage for which you paid insurance premiums and that you are entitled to use.

What Does That Mean for Your Scottsdale Personal Injury Insurance Claims?

What subrogation means is your own insurance company might attempt to collect from, and eventually reduce, your personal injury settlement.  Yet, your insurance company will not reimburse you for the insurance premiums which you have paid for those covered expenses.  It is a windfall to the insurance company at the expense of the insurance consumer who is a victim of an accident. The insurance consumer does not get the benefit of his or her foresight in obtaining first-party insurance protection.

Not Every Insurance Company’s Claim for Subrogation Is Valid

After your insurance claims are processed, if you file a personal injury lawsuit against the party who was at fault for your or your family member’s injuries or losses, you will then usually be given a form to complete. To process the insurance subrogation, you will be asked to complete a type of insurance subrogation questionnaire. This form seeks in-depth answers to questions about the incident that led to the injuries or losses suffered and, importantly, whether you’ve retained a personal injury attorney to represent you. Depending upon your insurance policy language, your insurance company may not even be entitled to the form. Unfortunately, the opposite may also be true depending upon your insurance policy. In some cases, if the form is not completed, your insurance company may withhold your benefits.

As an experienced Scottsdale personal injury insurance attorney will explain that not every insurer has a legitimate subrogation claim or lien. Fraudulent subrogation claims and liens are perhaps as common, if not more so, than the legitimate claims. In some instances, the insurer asserting a right of reimbursement may attempt to claim more than it is entitled to from the settlement. The validity of a subrogation claim depends upon a variety of factors including, but not limited to: what type of first-party benefits were paid; whether appropriate liens have been recorded and notice given; whether the first-party insurance policy has language allowing subrogation and reimbursement; or whether the first-party insurance coverage is a government plan, private plan, or ERISA plan.

In subrogation, you really need a legal advocate protecting your rights. Our office represents injured parties with respect to their injury claim and as part of that representation, we also represent the party with respect to filed liens and subrogation claims related to that personal injury.

To assure that you receive everything you should in your personal injury settlement, make sure that your attorney is involved early on with not only the at-fault party’s insurance company, but your own insurance companies as well. In this way, your attorney can identify any valid insurance liens and subrogation claims, and also protect you from illegitimate claims.

Our office ONLY handles first-party subrogation claims in conjunction with a third party personal injury claim. Subrogation issues in Scottsdale personal injury insurance claims make up a very technical area of insurance law that is a part of every personal injury practice. If you find yourself injured in an accident that might involve an insurer’s subrogation claim, then please contact the Law Offices of Shane L. Harward, PLC, today.

If you have not been injured in an accident, our office will NOT get involved on a subrogation claim. Likewise, if you caused the accident, our office does NOT provide a defense to at-fault parties who are being sued by an insurance company for third-party subrogation.