If you were recently involved in a car accident caused by someone else’s negligence and filed an insurance claim, or if you were involved in an accident and another party filed a claim while alleging that you are at fault, you may have heard the term “insurance subrogation” used.
Insurance subrogation is a common practice when one party files a claim and seeks compensation for his or her losses. At the same time, it is still important to know how to deal with insurance subrogation.
We will tell you more about insurance subrogation generally, how subrogation claims work, and what individual claimants and insureds need to know about subrogation.
Learning More About Subrogation Claims in Washington State
What is a subrogation claim? In short, subrogation is a legal term that refers to the process in which one insurance company files a claim against a third party to recoup money that the insurance company already paid out to one of its insureds. To understand how this works, it is important to gain a better understanding of how insurance law works in Washington more generally.
- File a first-party claim: This is a claim filed through the injured party’s own insurance company. With a first-party claim, the insured pays his or her deductible, and then the insurance company can seek to recoup both the deductible and other costs paid out through subrogation from the at-fault driver’s insurance company or from the at-fault driver directly.
- File a third-party claim: This is a claim filed through the at-fault driver’s own insurance company. Since the at-fault driver’s insurer pays damages, there is usually no insurance subrogation involved. However, when an injury victim files a third-party claim, she or he can run up against insurance limits that can limit the total amount of recovery. In Washington, a driver must have a minimum of $25,000 liability insurance for injuries to a single person in an accident, $50,000 total for injuries in a single accident, and $10,000 for property damage. If an accident results in more than $50,000 in injuries total or more than $10,000 in property damage, the injured party may not be able to get full and complete compensation through a third-party claim.
- File a personal injury lawsuit: When an insurance claim does not provide full compensation, an injured party may be able to file a lawsuit against the at-fault party.
Understanding How Subrogation Works: A Hypothetical Example
The process of insurance subrogation is often easier to understand with an example:
Jane is involved in a car accident in Yakima. The accident occurred when another driver, Mark, ran a red light and crashed into Jane’s vehicle in a side-impact collision. Even though Washington is a “fault” state for car insurance purposes—meaning that Jane could choose to file a claim either with her own insurance company or through Mark’s insurance company—Jane decides to file a claim through her own insurance company.
Jane reasoned that the claim might be handled more quickly, and she was also concerned about insurance limits. It turned out that Mark not only damages Jane’s car and caused Jane’s injuries, but in the same crash, Mark also sideswiped another vehicle and caused significant injuries and property damage exceeding the amounts of liability coverage he has.
Now, Jane has a $1,000 deductible for her own insurance coverage. She pays the deductible, and her own insurance company tells her it will pursue subrogation. Jane’s insurer provides her with $40,000 in injury coverage and $20,000 in property damage coverage. Then, Jane’s insurance company begins the subrogation process against Mark.
While subrogation usually just involves insurance companies (in this case, Jane’s insurer pursuing subrogation against Mark’s insurance company), in some situations an at-fault party like Mark can also receive notice that Jane or Jane’s insurer is pursuing a subrogation claim against him.
Timeline of the Typical Insurance Subrogation Process
In practice, here is how a timeline for Jane’s claim might look:
- Jane is injured in the accident caused by Mark’s negligence;
- Jane files a first-party claim through her own insurance company;
- Jane’s insurance company investigates the claim;
- Jane pays her $1,000 deductible;
- Jane’s insurance company pays out benefits to Jane;
- Jane’s insurance company pursues subrogation against Mark through his insurance company;
- Mark’s insurance company provides the money (or a settlement) that Jane’s insurer is seeking through subrogation; and
- Jane receives her $1,000 back from her deductible if the insurance subrogation process is successful.
In some cases, Mark’s insurance company might not agree to compensate Jane’s insurance company. Ultimately, Mark may be subrogated against, or Jane may file a lawsuit against Mark. However, if Mark has no personal assets, it can be difficult to obtain reasonable compensation.
Contact an Accident Lawyer in Washington
The insurance claims process after an accident can be extremely complex, especially when insurance subrogation is necessary. If you were involved in an accident and have questions about filing an insurance claim, or if you have concerns about the insurance subrogation process, it is important to discuss your situation with an experienced Yakima personal injury attorney
The advocates at our firm are dedicated to providing aggressive representation to individuals who have been injured because of another party’s negligence or harmful action. Contact Kapuza Lighty PLLCto learn more about the services we provide.