Subrogation refers to an insurance company’s legal right to claim a portion of a policyholder’s personal injury settlement as reimbursement for the benefits they have paid for an injury caused by a third party. The basic idea behind Nevada’s subrogation law is that accident victims cannot be paid twice for the same injury (e.g., by both the insurance company and the negligent party). As a result, subrogation may dramatically reduce the amount of compensation an injured party can walk away with.
Nevada’s law on subrogation upholds an insurance company’s ability to include subrogation rights in their contracts with policyholders; therefore, allowing them to recover money paid to you by another insurance company. In legal terms, a company or entity has the legal right to “step into the shoes” of another party to pursue a claim for damages (reimbursement).
Following an accident, insurance companies, medical providers, or government programs may place a subrogation interest or lien on any settlement or judgement you obtain. Those third parties are seeking repayment if someone else is found to be at fault. For example:
Joan gets rear-ended and suffers $20,000 worth of medical expenses (note: this is separate and apart from any property claim she may have for damage to her vehicle), $10,000 of which are paid by her auto insurance, $8,000 of which are paid by her health insurance, and $2,000 she pays out of pocket. Joan is required to pay back her auto insurance and health insurance companies for any amounts they paid on her behalf (here, $10,000 and $8,000 respectively) if she receives a settlement.
Subrogation interests are most often asserted by medical providers, Medicaid, Medicare, and health insurance plans. However, in many cases, insurance companies are actually willing to reduce the amount they will accept in satisfaction of their subrogation lien if it helps inspire a settlement. This sometimes results in the injured/insured walking away with more money in his or her pocket. If you do not receive a settlement or lose your case, you do not have to pay them back. If you haven’t signed any sort of release interfering with the insurer’s rights, the insurer is still free to pursue payment from the at-fault party. Speak with an experienced personal injury lawyer in Las Vegas to understand your legal options.
The following are some of the ways subrogation might affect you if you are involved in an accident in Nevada.
If you are involved in a car accident and carry collision coverage, your insurance company will pay for your car to be repaired regardless of fault. If another party was at-fault, your insurance company has the right to subrogate that amount of money paid on your behalf from the third-party who is at fault (other driver). Your insurance company will talk to the other driver’s insurer to be reimbursed. Your insurance company can also obtain your paid-deductible and refund it back to you since you were not responsible for the collision. It’s important for insurance companies to subrogate this money because it will keep your rates and premiums low.
Many insurance policies contain provisions for uninsured or underinsured motorist coverage. When an insurer pays benefits under this policy provision, it is in effect paying you a debt owed by the at-fault driver. They then have the right to take legal action against the uninsured or underinsured motorist in an attempt to recover as much as possible of the amount they have paid out.
Employers in Nevada are required by law to carry workers’ compensation insurance to pay benefits to workers who are injured on the job, regardless of fault. However, if there is a third party who is responsible for the accident, the insurance carrier has the right to subrogate benefit payments by suing the at-fault party.
Alternatively, the injured worker may choose to sue the third-party in conjunction with filing a workers’ comp claim. If the injured worker receives a settlement, the workers’ comp insurance carrier may have the right to subrogate a portion as reimbursement.
The Nevada Supreme Court determined that auto insurance companies cannot collect additional money for medical payments coverage that the policyholder has already paid money for as part of their insurance policy. In other words, medical payments covered by an auto insurance policy are not subject to subrogation. As a result, it is in your best interests to exhaust your medical payments coverage if you have it before using your health insurance to cover treatment costs.
Having a lawyer when your insurance company is working through their subrogation claim will make sure they remain fair. We understand this process, and can help ensure you recover the compensation you need for out-of-pocket expenses and to get your life back. Contact Harris & Harris Injury Lawyers today for a free consultation.