In the insurance industry, “subrogation” gives insurance carriers the legal right to pursue 3rd parties that caused or are responsible for an insurance loss to one of their insured clients. Personal Injury Lawyers in Nepean understands that subrogation enables the insurer to recover the claim amount paid to the insured for their loss. Furthermore, this is commonly occurring in auto accident cases but is also applied in cases involving healthcare and property/casualty policy claims.
Understanding Subrogation Actions
Subrogation actions are taken by insurance companies when their insured clients sue at-fault individuals for their injuries. For example, let’s assume you’ve suffered injury in a motor vehicle accident and have been placed on long-term disability as a result. Your insurer will act on your behalf and pay for your disability. If you sue the at-fault person for your injuries, your long-term disability insurer will pursue a subrogation action for reimbursement of their expenses out of the settlement you received.
When your insurer pursues the at-fault party for damages, they literally “step into the policyholder’s shoes” and have the same legal rights and standing as the policyholder does when they’re attempting to get compensated for their losses. Additionally, if the insured client doesn’t have the right to sue the at-fault party, the insurance company won’t be able sue them either.
Waiver of Subrogation
Waivers of subrogation are contractual provisions where insured clients waives the right of their insurer to seek compensation or redress for losses from at-fault or negligent parties. Insurers typically charge additional fees to include this special endorsement. Many construction contracts and leases include waivers of subrogation clauses. These provisions prevent one party’s insurer from going after the other party when attempting to recover the money the insurer paid to the insured client when resolving a claim.
Is the Victim affected by a Subrogation Action?
The subrogation process was designed to protect the insured party and is very passive for the accident victim from the fault of the other insured party. Both party’s insurance companies work to mediate the case and legally arrive at a conclusion where payment or settlement is concerned. The insured client benefits because the at-fault party must make restitution to the insurance company during the subrogation action, which in turn helps to keep the cost of the policyholder’s insurance lower.
Understanding subrogation actions can be challenging and the failure to do so can be costly for the injury victim. If you’ve suffered injury in an accident and are overwhelmed regarding your subrogation rights, you should speak with an attorney that specializes in subrogation law. This will help you get clarity and better insight in your own case.