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What Is a Subrogation Claim?

Colburn Law

Understanding Subrogation Claims in Washington State

If you were recently involved in a car accident in Washington state, you may have received notice from an insurance company stating that they are filing a subrogation claim against you. Most people do not know what a subrogation claim is until after they receive these notices.

What Is Subrogation?

When you are involved in a car accident, the insurance company will investigate the incident and determine who was at-fault for it. Washington follows a comparative fault car insurance system, which means that a person injured in a car accident has three options for claiming compensation:

  • Filing a claim with his or her own insurance company
  • Filing a claim with the at-fault driver’s insurance company
  • Filing a personal injury lawsuit in civil court against an at-fault driver

Settlements for car accident can cover damages such as medical expenses, vehicle repairs, and pain and suffering. If an injured person in a car accident files a claim for compensation with her or her own policy, his or her insurance company will provide the funds and continue to investigate who was at-fault.

If the insurance company finds that the other driver was at-fault for their policyholder’s accident, the company will file a subrogation claim against the at-fault driver and his or her insurance company. If the insurance company finds that you were at-fault for the accident, you and your insurance company may have to pay for the settlement that the company had to pay out.

An Example of How Subrogation Works

To understand more about how subrogation works, imagine a scenario where Emily is driving to work when suddenly her car is rear-ended by another vehicle driven by Jack. Emily sustains injuries and her car is significantly damaged. She files a claim with her insurance company, which covers her initial medical bills and car repair costs.

Following this, an investigation ensues to determine the fault in the accident. The insurance companies of both parties, along with legal authorities and Emily’s personal injury attorney, conduct an in-depth analysis of the accident scene, gather statements from, and review any available traffic camera footage. In this case, evidence such as the position of the vehicles and eyewitness accounts indicate that Jack was at fault for the collision.

Then, subrogation comes into play. After compensating Emily, her insurance company then connects with Jack or his insurance company to recover the amount they paid. They do this because Jack is deemed the at-fault driver. This process not only allows Emily’s insurance company to recoup its expenses but also helps in keeping Emily’s premiums from rising due to a claim for an accident she did not cause.

What to Do If You Face a Subrogation Claim

If you do receive notice of a subrogation claim, contact your attorney and your insurance company as soon as possible. Your actions after you receive the claim will depend on whether or not you have car insurance.

  • If you do have car insurance, your insurance company should handle the majority of the correspondence with the insurance company that filed the claim. As soon as you receive notification of the subrogation, report it to your insurance company. Your company should already know about your accident, and may likely know about your claim. From this point forward, your company will likely handle the subrogation process for you.
  • If you do not have car insurance, you will need to seek the assistance of a car accident attorney. The insurance company that is pursuing the claim will contact you to collect money you may not have – and if they discover you do not have the funds, they may drop the claim. However, some companies can engage in aggressive collection tactics. An attorney can help you protect your rights and discuss your options, such as whether fighting your subrogation claim is possible.

Subrogation Waivers and How They Work

A subrogation waiver is an agreement within an insurance policy that prevents the insurer from recovering the cost of a claim from the at-fault party in an accident. The main reason that drivers seek a waiver of subrogation is often to streamline the claims process. It eliminates the insurer’s need to pursue a third party for reimbursement, potentially speeding up the compensation for the insured.

However, this expedited process comes with trade-offs. Insurance companies often charge higher premiums for policies with a subrogation waiver. This is because the insurer assumes a greater risk by agreeing not to seek reimbursement for paid claims. While the policyholder might benefit from faster claim resolution, it often results in increased costs in the long run.

How Does Subrogation Affect a Personal Injury Lawsuit?

Personal injury lawsuits operate separately from insurance claims, but the two are closely intertwined. In many car accident cases, the victim initially files an insurance claim against the at-fault party responsible for the accident. If the at-fault party’s insurer denies the claim or offers a lower settlement than desired, the victim can escalate the claim by filing a personal injury lawsuit in civil court.

Subrogation is a critical factor in personal injury lawsuits, particularly when it comes to the final settlement. During the claim process, your health or auto insurance company may initially cover your initial medical bills or repair costs. However, subrogation allows your insurance company to seek reimbursement for the expenses that they previously covered.

If your insurance company exercises its subrogation rights and successfully recovers a significant amount from the at-fault party’s insurer, the amount you receive from your personal injury settlement could be reduced. Essentially, a portion of your settlement may go to your insurance company instead of fully compensating you.

In this situation, it is important to work with a personal injury attorney who can help you understand how subrogation could potentially affect your settlement. They can also work to limit the impact of the subrogation claim on your compensation, negotiating to prioritize your interests and secure the maximum possible amount for your recovery.

How to Fight a Subrogation Claim

If you believe that you are receiving an unfair request for subrogation or you do not have insurance to cover your claim, contact an attorney as soon as possible. The insurance company may have missed details about the accident when determining who was at-fault, and your attorney can assist you with fighting the claim in a number of ways.

  • Your attorney will have access to resources to conduct a full-scale investigation into your claim, such as examining medical records, surveillance records, and police reports.
  • Your attorney can help you perform tests such as accident reconstruction to support your version of events.
  • Your attorney can enter into negotiations with the insurance company on your behalf, advocating for your story and best interests.
  • Your attorney will have knowledge of subrogation litigation and have experience assisting other clients through the same situation, providing guidance when you need it.

If you need assistance with a subrogation claim after a car accident, consulting with a Bellevue car accident attorney is one of the first steps you should take. Whether you need help lowering your contribution or fighting the claim altogether, an experienced attorney can provide valuable support.