Subrogation is a complicated concept and likely one that you had not heard of until getting involved in a lawsuit. Narrowing the scope of this blog to personal injury cases, subrogation allows an insurance provider to stand in the shoes of the injured party. In the context of personal injury claims, the question is who should pay for an injured party’s medical expenses and how much should be paid.
Let me illustrate. Say you are injured in a car accident at no fault of your own and you are rushed to the emergency room. After being discharged, you begin treating with an orthopedist. Subsequently, you need surgery and are required to undergo weeks of physical therapy. The whole time, your health insurance is paying for all or a portion of your treatment costs. You decide to sue the at-fault driver. Now the question is whether the at-fault driver’s insurance should reimburse your health insurance for the treatment it paid for. The thought being that you, the injured party, would never have needed this treatment but for the actions of the at-fault driver and thus the at-fault driver’s insurance should be paying for your treatment. Subrogation would allow your health insurance company to stand in the shoes of you, the injured party, to recover those costs of treatment that had been paid.
Subrogation, however, is not an automatic right. Just because a health insurance or benefit provider paid for your treatment resulting from an accident does not mean the health insurance company is automatically entitled to reimbursement from the at-fault party’s insurance.