What is Subrogation and Why Does it Matter?
Under the law, it’s possible for one person to step into the shoes of another and assume his or her debts. When this happens, the party taking on the debt also obtains the legal rights held by the party who originally owed the debt.
It’s a process known as subrogation, and it’s especially common in the insurance industry. It’s important to know what it is if you’re involved in an accident or injury, since the use of subrogation can limit or even eliminate financial settlements in personal injury cases.
Subrogation In the Insurance Industry
Insurance subrogation occurs when an insurance company assumes some of your rights after paying your bills. For example, if you’re injured due to another person’s negligence and your health insurance company pays your medical expenses, the insurance company then has the right to sue the negligent person to recover the money it spent on you.
In situations where an injured person wins a monetary verdict or reaches an out-of-court settlement with the negligent party, the insurer may turn around and seek to recover money from the injured person, since he or she has already recovered from the negligent party. Where medical and other expenses soar following a major catastrophe, this can mean a person dependent on the money he or she has received from a lawsuit will be forced to turn around and give it to an insurance company.
Insurance companies aren’t the only businesses that practice subrogation. Under Georgia law, hospitals and nursing homes are allowed to place liens against lawsuits to make sure they’ll be paid before the injured party.
If you have a personal injury claim and health insurance, a personal injury attorney can steer you through the pitfalls that lay waiting for you in the field of subrogation.
To learn more about Georgia personal injury claims, check out the articles, blogs and videos at tywilsonlaw.com and order Ty’s FREE books. Remember – knowledge is power – especially when it comes to dealing with insurance companies about your Georgia injury claim.
If you have specific questions, give Ty a call at 1-866-937-5454.