California Subrogation Law
If you sustain an injury caused by the negligent actions of someone else, you will likely be able to recover compensation through an insurance settlement or through a personal injury lawsuit jury verdict. However, the process of recovering compensation takes time. While a case is ongoing, injury victims are often left scrambling to pay for their medical bills, physical therapy and rehabilitation, and various other expenses.
Individuals can often obtain funds from their own insurance carrier before they recover compensation through a settlement or jury verdict. However, under California law, there are certain circumstances where insurance carriers have the right to recover the money that they paid to you from the settlement you receive from the at-fault party. This is called subrogation.
Understanding Subrogation in California
Subrogation in California can apply anytime an insurance carrier makes payments to an individual who is not primarily at fault for an accident. In other words, the insurance carrier is covering the expenses that should rightfully be paid for by another party (usually the at-fault party or their insurance carrier).
Some of the most common types of insurance payments that are made in these situations include:
- Med Pay insurance payments. Medical payment coverage is an optional coverage offered by many auto insurance policies. This allows a person to send their medical bills directly to their own insurance provider for quick payment.
- Uninsured or underinsured motorist payments. Uninsured or underinsured motorist coverage is another optional type of auto insurance that allows individuals to seek compensation from their own insurance provider if the other party has no insurance or insufficient insurance coverage.
- Health insurance payments. Individuals often turn to their personal health insurance provider to help cover treatment costs for accidents caused by other individuals.
In all of the situations mentioned above, the insurance carriers have the right to seek subrogation payments should a settlement or jury verdict come through to pay compensation for the injury that they have already provided payment for. You, as the injury victim, cannot do anything that compromises the insurance carrier’s right to recover the money they originally paid to you.
How Long Does Subrogation Last?
In most situations, injury victims will not be involved with the subrogation process at all. The insurance carrier will usually make the subrogation claim on its own. If you are working with a personal injury lawyer for your personal injury case, you need to ask them about subrogation, particularly if you have used your personal insurance coverage to pay for any of your expenses while you wait for an eventual settlement or jury verdict. Your attorney will be able to tell you how subrogation will work and how it can affect your compensation recovery.
Will Subrogation Affect My Recovery?
Insurance carriers will not take your money directly when they seek compensation through a subrogation claim in California. However, this is a process that will reduce the total amount of money that you receive for a personal injury claim. After all, if you receive compensation through your personal injury settlement for money that has already been provided, this would almost be like “double-dipping.”
Various laws in California allow for insurance carriers to recover compensation, but they do place limitations on how much can be recovered by the insurance carriers. In general, insurance providers are limited to recovering the lesser of either a percentage of the eventual settlement or the cost of the victim’s medical services. If an individual is represented by an attorney, insurance carriers can recover up to one-third of the total settlement value. If the individual does not have an attorney, insurers are limited to recovering one-half of the settlement value.