For those injured in a car accident, the term “subrogation” can seem foreign. Given that it deals with complex insurance benefits and contracts and that such negotiations often occur between insurers and attorneys behind the scenes, most never have much cause to consider it. But if you’re injured in a Fort Lauderdale car accident, health insurer or auto insurer subrogation rights can have a substantial impact on the amount you actually collect, so it’s important to have at least a basic concept of what it entails.
What is Subrogation?
The term “to subrogate” means to substitute one party for another with regard to a legal claim or debt. The purpose of subrogation is to enforce final payment of compensation from the driver who was at-fault – and to prevent double recovery.
So after a car accident, let’s say your underinsured auto carrier covers a percentage of your lost wages. If you win a claim against the other driver – and part of the damage award includes lost wages – your UIM insurer would have a subrogation right to reclaim all or some of its money from your damage awards.
Alternatively, let’s say your health insurer covers all or a portion of your medical bills after a crash. If you are later awarded medical bill damages from the at-fault driver’s insurer, your health insurer can put a lien on those awards to recover the medical bills that it covered for you. In this way, you are prevented from receiving a duplicate damage award for expenses that have already been covered for you – and the at-fault party is the one ultimately responsible for covering damages due to the negligence (their own or their insured).
Any sources that have made payment for injuries may have a legal claim to any settlement/verdict you collect on from the at-party. They have a right to be reimbursed for payments made to you, your doctors or other health care providers. The most common entities asserting rights of subrogation after a Florida car accident are:
- Health insurers;
- UM/UIM insurers
It is important to note that insurance providers can only exercise subrogation rights if their insured/client is NOT responsible for the crash.
It should be noted that for the most part, Florida’s PIP (personal injury protection) benefits, coverage mandated under the state’s no-fault auto insurance law, are generally not subject to subrogation laws.
Florida Insurance Contract Law in Subrogation Claims
Florida has stringent standards when it comes to insurance contracts and subrogation rights.
One of those starts with F.S. 627.727(6), which pertains to your UM/UIM insurance coverage (coverage you carry in case you are hit by a driver who doesn’t have insurance or lacks enough coverage to fully compensate you for your losses). This provision holds that before you can accept any kind of bodily injury settlement from the at-fault driver, you have to inform your UM/UIM carrier in writing.
From their, the insurer has just 30 days in which to decide to forego or retain their subrogation rights. If the insurer waives subrogation rights and authorizes the settlement, the injured party can execute a full release of the at-fault driver and agree to the proposed settlement without prejudice. However, if the UM carrier refuses permission to settle and retains its subrogation rights, the insurer must then pay you that amount – after which time it is then free to pursue subrogation rights against the at-fault driver.
If you’re working with an experienced Fort Lauderdale car accident attorney, subrogation may never be a term you hear. It’s generally one of the final steps in resolving car accident settlements, and it’s handled by your attorney, your insurer and the attorney/insurer for the at-fault driver.
Questions concerning subrogation rights and what it means for your car accident case can be resolved with the aid of an experienced personal injury attorney.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
F.S. 627.727(6), Florida’s UM/UIM Insurance Law