Did you know you may be legally required to repay your own insurance company for costs they incur when paying for your medical bills after a car crash in Oklahoma? Read here to find out what subrogation is and its significance to Oklahoma personal injury law.
Subrogation Explained
Sometimes when an insurance company or other entity pays medical or other expenses on your behalf, they are entitled to get their money back if you collect money from the tortfeasor. This is called a right of subrogation. It is simply the right of the payor to be paid back in certain circumstances.
Subrogation is designed, in theory, to prevent a plaintiff from collecting more than once for the same element of damages., to prevent “double-dipping.” For example, suppose that you have an accident and have med-pay/PIP coverage on your own policy which pays the first $10,000 of your medical bills, which totaled $20,000. Then, you sue the driver who was at fault for the accident and get money from the jury for pain and suffering, lost wages, as well as the full $20,000 for your medical bills. At this point, you have collected compensation for your medical bills, $20,000, from the defendant and have also had $10,000 of the bills paid by your own insurance company. As a result, you have a net gain of $10,000 with regard to your medical bills (you received $30,000 for $20,000 worth of bills). In Oklahoma, this is seen as unfair and the law gives your own insurance company the right to be paid back the $10,000 that it spent on your medical bills.
It is important to understand that you only have to pay back your insurance company if you collect that money from the tortfeasor. Suppose the defendant had no money and no insurance, so you were unable to collect any money in your claim or lawsuit. In this instance, you would not have to pay back your insurance company. You only have to pay them back to the extent that you make an overall gain by collecting from the party at fault.
Subrogation in “No-Fault” States
Subrogation is becoming more complicated in practice because of modern no-fault laws. While this is typically of no concern for a driver in Oklahoma (a fault state), it might benefit you to know how subrogation works in other states.
Traditionally, you would collect all medical bills from the defendant and then pay back your own insurance company to the extent that they paid your bills. It was argued that the defendant, who was the wrongdoer, should not benefit from you having purchased insurance by getting a credit for what your insurance paid. No-fault laws, however, are changing this.
In many states today, to the extent that your bills are paid by your own insurance, the liability of the defendant is reduced and you do not have to pay back your own insurance company.
Paradoxically, the defendant gets a credit for you having purchased insurance protection for yourself. Thus, using the previous example, the defendant would only have to pay you for $10,000 of the $20,000 in medical bills because your own insurance paid the first $10,000. In turn, you do not have to pay anything to your own insurance company. In effect, you have paid your hard-earned dollars for a policy that ultimately financially benefits the wrongdoer.
As you might imagine, many people have some moral concerns about the fairness of these systems, although it must be admitted that it simplifies the process to some extent. No-fault laws are being implemented in more and more states under the theory that they reduce lawsuits and, therefore, insurance costs.
Free Case Evaluation: Oklahoma City Car Accident Attorney
If you’ve been injured in a car accident, then it’s time you speak with an Oklahoma City attorney who knows how to tackle these types of incidents in a timely, respectful, yet aggressive manner to protect your interests. It’s as easy as reaching out to one of our lawyers in our Oklahoma City Personal Injury Law Firm office by simply calling (405) 395-2900.
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