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What Is Subrogation?

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By Christopher Coble, Esq. on April 14, 2015 10:58 AM

You've just gotten into a car crash. You were entirely innocent, and the other driver was 100 percent at fault. Your insurance paid your medical bills and your car repair bills. You think everything is all done. But, the insurer is contacting you and asking questions about what happened and who is at fault. They keep throwing around the words subrogation and lawsuit.

What is subrogation? Should you be worried?

Subrogation

Subrogation literally means one party stands in the place of another.

Normally, you need to have standing to sue, and to have standing, you must be the injured party. For example, I get hit in the face by a ball Tommy threw. I feel bad for Tommy, so I don't want to sue him. My friend Jenny is so mad at Tommy that she wants to sue him on my behalf. However, since she wasn't the person who suffered the harm, she can't sue.

Subrogation allows a third party, who would usually not have standing to sue, to pursue a claim on behalf of the injured party.

Insurance

Subrogation commonly comes up in the insurance context. After an accident, your insurance company usually pays your medical bills. Then, it will turn around and assert a subrogation claim against the other driver to get reimbursed for the money it paid to you.

Subrogation can also work against you. For example, the insurance company pays you $10,000 for your medical bills. You sue the other driver, and you win $10,000 for medical bills and $5,000 for pain and suffering. Lucky you, you got your medical bills covered twice!

Now, your insurance company can make a subrogation claim to take the $10,000 for medical bills that the other driver paid. Your net earnings would still only be $10,000 for medical bills and $5,000 for pain and suffering, not $20,000 for medical bills.

Child Support

Subrogation also comes up often in the child support context. For example, say one parent owes child support but isn't paying it, and the other parent must apply for welfare assistance such as food stamps. The government could then go after the delinquent child support payer for reimbursements of benefits paid to the other parent.

If an insurance company or the government is bringing a subrogation claim against you, an experienced attorney may be able to help.

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