Subrogation and your Personal Injury Auto Claim - PIP Insurance

Posted Saturday, August 18, 2012 by Chris Thayer

There are entire books written on the concept of subrogation, and I am not going to attempt to cover all aspects or go into extensive detail. I will try to explain at least the basics, as it relates to a typical car accident personal injury claim where your medical expenses are paid for out of your Personal Injury Protection (PIP) coverage.

The average person has probably never taken a close look and really read all the details of their auto insurance policy. If you did, you would come across a section entitled “subrogation” relating to your PIP insurance. Your PIP insurance (assuming you have not expressly waived this coverage when you purchased your policy) provides that the insurer will pay for all medical expenses that are reasonable, necessary and related (i.e., caused by) the collision - regardless of fault.

If you pursue a claim against the at fault party for personal injuries. A portion of your claim involves the medical expenses for treatment received, which were previously paid by your PIP insurer. To the extent you obtain a recovery from the third party’s insurer, your own insurance company has the right to at least partial reimbursement for the payment of medical expenses. This is subrogation. There are exceptions and there are situations where your PIP insurer is not entitled to be reimbursed for any payments. In Washington, if you have had to hire an attorney to help you with your claim, the insurer is normally required to reduce its subrogation claim to reflect the fact the proportionate share of attorneys’ fees and costs that you have incurred. The theory is that the PIP insurer should not get a “free ride” and get all of its money back, since the only reason they received the payment is because the claimant retained an attorney.

The intricacies and exceptions to subrogation are just too complicated to try to explain here in short form and on this public forum. But, if you want some help getting to sleep tonight, pull out your auto insurance policy and read through it. You will find many interesting clauses - and limitations - that you probably never knew were there, including a subrogation clause.