Among the obstacles that hinder the settlement of Maryland car accident claims is subrogation.
Subrogation is when a party, typically an insurer, pursues monies they have paid to or on behalf of their insureds, from the at-fault party and/ or their insurer. The mechanism for this process is invariably described as the subrogee ( Insurance company) standing in or stepping into the shoes of its insured or subrogor. The concept is that some benefits paid to an injured party by their own auto or health insurers should ultimately be paid by at at-fault person or their insurer.
As an example, many of our clients find that the at-fault driver and their liability insurers, are initially reluctant to assume legal economic responsibility for the costs and consequences of a crash. Thus the innocent driver turns to their own insurer for a rental vehicle and repairs
Often the innocent victim's insurer subsequently pursues the at-fault driver's liability insurer for rental vehicle expenses and repairs they have defrayed. Their legal ability to do this is subrogation or substituting themselves for their insured.
The most common obstacle to arriving at a fair sum to compensate an injured party is the legal subrogation by health insurers for medical expenses they have paid. Most health insurance agreements or schemes include the requirement that insureds cooperate in helping their health insurer recover sums expended for their accident-related care.
There are a host of different permutations of subrogation including on behalf of short-term disability policies and also workers compensation insurers.
If you are in an accident and collect workers comp benefits you can rest assured that the workers compensation payor will be looking for recompense out of your settlement or ultinate verdict.
It works somewhat like this. Jim gets hurt in a crash and the workers comp insurer for his employer pays his medical bills, lost time from work ( Temporary total or partial disability) and some permanent impairment benefits.
These payments total $27,000.00. Jim settles his crash case for $60,000.00. The workers compensation insurer is entitled to its $27,000.00 out of the $60,000.00 however if Jim had an attorney who is charging him 1/3 then the workers comp insurer is legally obligated to reduce their entitlement by 1/3 as well.
Thus the math on Jim's settlement is subrogation lien of $27,000.00 reduced by 1/3 to $18,000.00. Jim's lawyer gets $20,000.00, workers comp $18,000.00 and Jim $22,000.00 in addition to the workers comp benefits he received previously.
There are nuanced ways to reduce subrogative payouts and that is why a lawyer who knows this field is essential equipment.
