What Do You Mean I Have To Pay It Back?! Protecting Your Personal Injury Claim From Insurance Subrogation

You pay your health insurance premiums diligently for good reason. Although you rarely benefit from your policy for anything more than routine checkups, you know that a day may come when you're seriously injured, and your mounting medical bills leave you thankful for the security of your health insurance plan. But what if you were forced to pay back any major claims you were awarded by your health insurance provider? Depending on where you live and the terms of your insurance policy, this very well could happen. 

Subrogation 

Subrogation refers to the ability of an insurance provider to seek reimbursement for any claims it pays out to its policy holders. Insurance companies argue that, by seeking subrogation, the money they recover from paid-out claims can be filtered back into their budget, thus decreasing insurance premiums for everybody enrolled in their policies. 

Most individuals and personal injury attorneys, however, feel that subrogation forces injured policy holders to pay twice for their insurance coverage -- one with their premium installments, and then again when they try to actually use the protection they've paid for with those premium installments. 

The Process

Usually subrogation comes into effect when you were injured by another party and attempt to recover damages from that party. At this point, your insurance company can claim that you've already been reimbursed once for your injuries, and place a lien on the money you are awarded by the third party. This lien allows your health insurance company to immediately take a cut of your reimbursement that is equivalent to the claim you were awarded by your insurance company, minus you premiums and deductibles. 

If You Don't Sue The Third Party

What if you're not interested in recovering any damages beyond that which you were awarded by your health insurance provider? What if a third party was at fault for your injuries, but your insurance took care of your medical bills, and you've got no interest in filing a personal injury claim against the person who was actually at fault for your injuries?

It doesn't matter. Your health insurance provider can file a lawsuit on your behalf to recover the damages. They can bring the third party to court and sue them for any money you or your insurance company paid out as a result of your injuries, and then send you a reimbursement check to cover just your premium and deductible. 

Tips For Protecting Yourself From Subrogation

You don't think that you should have to pay back your insurance company for coverage that you already paid to have, so how can you protect yourself? 

Check Your State Laws. The extent to which your insurance company can collect on your damages ranges greatly by state. To find out whether or not your state allows your insurance company to recover any claims paid out to you following an injury, check its stance on the "made whole doctrine".  If your state wholly supports an "insured whole" doctrine, you're protected from forfeiting any portion of damages you might recover when suing a third party.

On the other end of the spectrum, however, are states that follow "insurer whole" doctrines. In these states, your insurance company can sue on your behalf and recover as much as they can get from you (if you were at fault) or a third party, regardless of whether or not that amount exceeds the claim they actually paid out to you.

If, after checking your state laws regarding subrogation, you find that you aren't protected, pay very close attention to the next tip on this page.

Check Your Insurance Policy

If a health insurance provider plans on attempting to recover the cost of any future injury claim you may file, they have to specifically state this in the terms of your policy. Scrutinize the fine print of your policy looking for any mention of a lien or subrogation, and consider switching insurance carriers if you find one. If you have a hard time understanding your policy, ask a personal injury lawyer to have a look at it and explain whether or not your insurance company will be able to collect from your injuries following a personal injury claim.

You already pay your health insurance premiums, so why should you have to pay your insurance company again if you are injured? You shouldn't. Protect yourself from health insurance subrogation by knowing the laws of your state, understanding the terms of your policy, and recruiting an experience personal injury lawyer, such as Charles Aaron PLC,  to help you get awarded all of the debt you are owed in the event you suffer a personal injury.