“Subrogation” and Personal Injury Claims


When a negligent driver seriously injures someone in a car crash, the victim is often put in a situation where they have little choice but to use their health insurance to pay their medical bills. However, the health insurance policy for which benefits are paid may include a subrogation provision which requires you reimburse the health insurance company for benefits they paid from the proceeds of any settlement or judgment.

A prime example of this might go as follows:

You are hit by another vehicle and are sent to the emergency room. You pay your copay as specified in your policy and your health insurance pays the rest of the bill. When it comes time to negotiate your personal injury claim for damages, your health insurance company may assert its “right of subrogation”, which gives it legal right to be repaid before you see any damages.

What is Subrogation?

When it comes to personal injury claims, subrogation is the legal right of a health insurance company to prosecute their insured’s claim for damages or seek reimbursement from settlements the insured receives. Nevada Revised Statute 689B.034 provides that a policy of group health insurance recognizes that “a provision for subrogation may include a lien upon any recovery by an insured from a third person for the cost of medical benefits paid by the insurer for injuries incurred as a result of the actions of third persons.” Consequently, if you settle with a defendant’s insurance company for the amount of your medical bills, and the insurance company demands subrogation or reimbursement, you will not have any money to cover your other damages.

Subrogation adds a layer of complexity to personal injury claims, as it has the potential to significantly reduce the amount of damages a victim can walk away with.

It is important to retain a personal injury attorney to not only prosecute your claim against the negligent parties, but also to maximize your recovery by making sure your health insurance is actually entitled to reimbursement or subrogation. This includes a careful review of your policy to determine the rights retained by the insurance company. Sometimes, the health insurance policies do not have sufficient language to seek reimbursement or subrogation. In addition, there are legal theories that can be used to reduce the insurance company’s reimbursement claim such as the Make-Whole-Doctrine and the Common Fund Doctrine.

The Make-Whole-Doctrine is a general equitable principle of insurance law that prevents an insurance company from enforcing its subrogation rights before the insured has been fully compensated for their loss. The Common Fund Doctrine can be used to reduce the reimbursement claim by the attorney’s fees that were incurred to create the common fund the insurance company seeks the benefit of.

It is important to retain an experienced personal injury attorney who understand and can utilize these doctrines on your behalf.

Medical Payments Coverage is an Exception

Significantly, medical payments that have been covered through an auto insurance policy’s medical payments coverage are not subject to subrogation in Nevada. The reason is that the Nevada Supreme Court determined that it violates public policy for an auto insurance company to collect additional money for coverage that the victim has already paid money for as part of their insurance policy. We therefore advise our clients to exhaust these payments before turning to their health insurance policies for coverage.

Seek Personal Injury Representation from Viloria, Oliphant, Oster & Aman L.L.P.

If you are looking for a smart personal injury attorney who gets results, contact Viloria, Oliphant, Oster & Aman, L.L.P. Our top-rated personal injury attorneys have obtained millions of dollars in damages for our clients. We will provide you with helpful, no-nonsense advice to help you attain maximum compensation to move forward with your life. We work on a contingency fee basis, meaning we will receive no fees unless we successfully resolve your claim. Call Viloria, Oliphant, Oster & Aman L.L.P. today at (775) 227-2280 to schedule a free consultation or contact our office through our website.

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