Subrogation

When another party causes your injuries, you can pursue a personal injury claim under Florida tort laws. You can seek compensation for your economic damages, including loss of income, medical bills, and other expenses. You may also receive compensation for your pain, emotional distress, impairments, and other non-economic damages.

A personal injury claim could take months to settle. In some cases, you may need to file a lawsuit, which could take more than a year to resolve. Your injuries are a significant factor that determines the timeline for a personal injury settlement.

The victim is often responsible for paying medical bills upfront while the case is pending. Most individuals use health insurance to pay for medical expenses while they pursue a personal injury case. However, health insurance policies usually have subrogation clauses.

A subrogation clause stipulates that the insurance company has the right to sue a party who caused your injuries if you do not pursue a personal injury claim. It also gives the insurance company the right to reimbursement for bills it paid from the proceeds of your personal injury settlement or jury verdict.

The subrogation clause usually requires you to cooperate with the insurance company’s efforts to exercise its subrogation rights. Some policies may include terms that limit your right to accept a personal injury settlement without the insurance company’s agreement. You may also be prohibited from signing a settlement agreement that includes language waiving or restricting the company’s subrogation rights.

Before accepting a settlement offer and signing an agreement, it is wise to ask an attorney to review the agreement and your health insurance policy. The attorney can determine your rights and responsibilities regarding subrogation rights. Additionally, the lawyer can tell you whether the settlement amount is fair.

Subrogation clauses prevent injured parties from receiving compensation for expenses they did not pay. Economic damages reimburse the injured party for money they lost. When their insurance company pays the medical bills, the injured party does not lose any money.

Therefore, subrogation claims prevent victims from “double dipping” when they settle their cases. The health insurance company is reimbursed for medical bills it paid related to the case. The injured victim receives compensation for the expenses they paid or the money they lost.

If you receive a subrogation notice from an insurance company, give the notice to your lawyer immediately. Never assume your attorney received the same notice or is aware of the subrogation claim. You also need to give your attorney a copy of all health insurance policies and statements from the company showing that the company paid medical bills related to your accident.

Your attorney reviews your health insurance policy to determine whether the company has the right to approve a settlement according to the subrogation clause. If so, your lawyer consults your health insurance provider to obtain their approval.

When all parties agree, you sign a settlement agreement. Often, personal injury settlement agreements state that the other parties do not admit they caused your injuries, but they agree to pay you a sum to settle your claim. You agree to waive your rights to file lawsuits or claims against all parties.

Before your attorney disburses the settlement proceeds, they must pay outstanding bills, subrogation claims, and medical liens. Medical providers and insurance companies are not required to negotiate lower payments for their liens.

However, skilled personal injury attorneys negotiate with these parties to lower the payoffs whenever possible. The goal is to keep as much money from the settlement as possible for you.

Most private health insurance policies have subrogation clauses. State law governs the subrogation rights for most private health insurance claims. However, federal law dictates subrogation rights for ERISA health insurance plans.

ERISA health insurance plans are offered through employers. Federal subrogation laws may differ. If your health insurance is provided through your employer, let your attorney know at the beginning of your case.

Medicare and Medicaid may pay medical bills for an accident or injury. Even though these are government programs, they are also subject to subrogation rights. If you do not reimburse Medicaid and Medicare, you could jeopardize your eligibility for coverage.

In addition to subrogation claims, your attorney must pay other expenses and costs from the settlement before you receive any funds. Examples of costs and fees an attorney pays from settlement proceeds include, but are not limited to:

• Medical liens
• Outstanding medical bills
• The expenses and costs of the case (i.e., copy costs, expert witness fees, deposition fees, filing fees, etc.)
• The attorney’s contingency fee

After deducting the required amounts from the settlement proceeds, your attorney pays you the remaining balance. Your lawyer should provide you with a written disbursement sheet showing each amount deducted from the settlement and to whom the amount was paid.