What Are Subrogation Rights Given To An Insurer?

As described in a recent article, "Who Is Going To pay Your Medical Bills?" when you need medical care after a serious Wisconsin car accident caused by another party, you cannot simply send your medical bills to the party at-fault to have them pay.

The party at-fault might end up reimbursing your expenses and paying other compensation when, through a settlement or in court, it has been agreed that they are liable. In the meantime, it is normally your own health insurer or medical payments insurance company who will foot the bill.

As soon as the causation of the accident has been established, these insurers will exercise their right of subrogation, which is a common clause in all insurance contracts. The concept is that if a person is injured and receives compensation for his or her injuries, he or she will be required to reimburse the insurers for the accident-related medical bills they paid.

There are, however, two different types of subrogation, and it is important to be aware of the difference between them.

Under common law subrogation, the victim only reimburses the insurance company when he or she has been "made whole" by the settlement or compensation received. In other words, as long as part of the damage claimed has not been paid by the at-fault party, the insurance company that paid the medical bills cannot request the reimbursement of these bills by the victim.

If the victim is insured through an Employee Retirement Income Security Act (ERISA) plan, the insurer's subrogation rights may vary widely according to the conditions of each plan. Usually, ERISA insurance plans require the reimbursement of all medical bills paid without considering whether the victim has been fully compensated or not.

Subrogation is an important aspect of your insurance coverage that could make a great difference if you are involved in a serious Wisconsin motor vehicle crash.

If you or someone you love has been hurt in a car, truck or motorcycle accident, contact Hupy & Abraham today at 800-800-5676 (toll-free) or 414-223-4800 (local) for a free evaluation of your case, or send us an e-mail with your questions. Hupy & Abraham, S.C. has offices in Milwaukee, Madison, and Appleton in Wisconsin, and Gurnee and Bloomington in Illinois.