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If you sustained an injury caused by the careless or negligent actions of someone else, you should be able to recover compensation for your losses. However, the process of securing compensation through an insurance settlement or a personal injury lawsuit can be time-consuming. It may be the case that you need to find other sources to pay your incoming medical bills caused by the injury, including your own insurance policies. However, insurance carriers may be entitled to repayment in the event you receive an insurance settlement or if a personal injury jury rules in your favor. This repayment process is called subrogation.
When we look at the definition of “subrogation,” we can see that this means that one person stands in the place of another person regarding a debt. When one person or entity pays a debt that was already paid by someone else, the person who originally paid the debt will be entitled to reimbursement from the person who should have paid the debt in the first place.
We know that can seem confusing, and what does this have to do with personal injury law?
Well, it is not uncommon for insurance carriers to pay for a person’s medical expenses or other losses while the individual is awaiting a settlement from an at-fault party’s insurance carrier or through a personal injury jury award. In some jurisdictions across the country, the insurance carriers that originally paid the expenses will legally be able to recover compensation for what they have already paid out.
Arizona is actually an anti-subrogation state. This means that private health insurers do not have subrogation rights against a person’s personal injury settlement. This standard applies across the board to most private Arizona health insurance plans.
There are some exceptions to this state’s anti-subrogation rule. These exceptions will apply to taxpayer-funded health care plans as well as government-operated health insurance plans. Additionally, there are some employee benefits plans that are allowed to pursue subrogation rights in certain situations.
Some Arizona residents have auto insurance policies that allow them to turn to their own insurance carrier for medical payment coverage if they are involved in a vehicle accident. You often hear these referred to as MedPay plans. However, if a person receives this insurance coverage while they are awaiting a settlement from an at-fault driver’s insurance carrier, then the MedPay payments may have to be paid back through subrogation.
For example, suppose Justine sustains a back injury after being rear-ended by Samuel. If Justine uses her own insurance to cover $10,000 worth of medical expenses but later receives $20,000 in a settlement from Samuel’s insurance carrier, Justine may have to pay back that $10,000 to her auto insurance carrier.
However, if Justine had private health insurance and used that coverage to hey her medical expenses, the subrogation rules likely would not apply because Arizona is an anti-subrogation state.
If you or somebody you care about has been injured in an accident caused by the actions of another individual or entity, you need to speak to a skilled Mesa personal injury lawyer as soon as possible. An attorney will be able to investigate every aspect of your claim and help you sort through where your compensation will come from while you are awaiting a settlement from an at-fault party’s insurance carrier.