Subrogation in a Texas Personal Injury

Michael Grossman, San Antonio Accident Injury Attorney, Explains Subrogation

Subrogation is a process whereby one insurance company gets paid back from another as recompense for moneys spent related to a loss or their insured (the customer).

There is a common misconception that subrogation is somehow beneficial for the injured victim. It is not. It’s not necessarily detrimental to the victim but it certainly does not exist to help them in any way. It is merely a process whereby the insurance company gets paid back for their own expenses associated with the victim’s loss.

Many people inaccurately believe that their insurance company will subrogate against another party and then share some of the proceeds. To be perfectly clear, your insurance carrier has no more interest in helping you than you than the other party’s insurance carrier has. The only way to ensure that your rights are being protected and that your interests are being looked out for is to hire an attorney that is on your side.

The subrogation process typically plays out in two ways:

• An insurance carrier knows that another party will ultimately have to pay them back so they will “float” an expense and then subrogate to get reimbursed
• An insurance company will provide moneys for damages incurred and they will only find out later that another party should have paid the money originally so they will subrogate against them for reimbursement.

An example of the first would be when your “full coverage” auto insurance policy will pay for your vehicle damage and rental car immediately after the accident, even when the other party is at fault. The idea behind this is that the other party’s insurance carrier may take days or weeks to accept fault and pay for your vehicle damage. In some instances, your insurance company will advance the money for repairs to speed the process along. Your insurance carrier will then subrogate against the other insurance company to get reimbursed. Another example would be when your health insurance carrier pays for your medical bills associated with an on-the-job injury. They know that ultimately your employer’s workers’ comp policy (if applicable) would be responsible for paying your medical bills, but will likely advance the money knowing that they can subrogate to be reimbursed later.

An example of the second use of subrogation would be when an insurance company does not know that the other party is liable or that there is another party that should pay for the expenses. For instance, our firm recently won a complex work injury case whereby the injured victim was hired by a temp agency and placed with another company. The temp agency had workers’ comp coverage but the company that was borrowing the employee did not. When the employee was severely injured the temp agency assumed that their workers’ comp policy was responsible for covering the damage and they paid for a six-figure medical bill. Through litigation we discovered that the second company was the party that was actually liable. Naturally, this realization was also good news to the temp agency’s workers’ comp insurance carrier as they could now subrogate against a liable party that they were formerly unaware even existed.

Subrogation should not be viewed by accident victims as necessarily bad or harmful in any way to their case. It is typically innocuous altogether unless you make the mistake of assuming that you do not need to pursue your own interests because you expect to be taken care of by your insurance company’s subrogation. Again, the only way to protect your self is to hire an experienced attorney who can help you determine the best course of action.