What is the Purpose of a Subrogation Letter?

Most people assume that their health insurance will pay for their medical treatments regardless of the reason for the treatments. This is why most people are shocked when they unexpectedly receive a subrogation letter in the mail after they have been injured in an accident. Just like other legal documents, receiving a subrogation letter may be confusing, especially if you aren’t familiar with the process or reason for the letter. If you have been involved in an accident, there is a chance you will receive a subrogation letter, so it’s important to understand what the letter means and how the letter can affect your finances going forward.

Subrogation and Insurance

The basic act of subrogation mainly happens between two insurance companies; yours and the other person or entity involved in your accident. The majority of people have both health insurance and automobile insurance, and both can use subrogation. In some situations, there is overlapping from various policies. For instance, your automobile insurance may include medical coverage for someone else that was injured in the accident. If your policy includes a $20,000 medical liability, it will only pay up to that amount, so if the damages are more than $20,000, the at-fault party is responsible for paying the difference. The at-fault issue is extremely significant in some states because proving who was at fault determines who is responsible for paying for recovery for the other person. If you were injured in the accident, the at-fault issue generally falls on the other party.

Following the Accident

The most critical thing is that get the medical care and treatment you need for your injuries. Keep in mind that adrenaline runs high after an accident, so it’s common for injuries to seem more minor than they actually are at the time of the accident. Severe injuries often require hospitalization, possibly surgery, and months of therapy. You may need to take time off of work for your body to heal and in a severe situation; you may not be able to return to work at all. Most doctors and many hospitals demand payment at the time of your treatment, so if you have health insurance, you’ll automatically use it to get your treatment.

Outside of the deductibles and co-pays, your health insurance will generally pay for your treatment regardless of the cause of your injuries. If you do receive a subrogation letter, it’s typically a little while after your accident. The insurance company will send the letter as a request for details about the accident and your injury. They will want to know if there was a third party involved n the accident and they will ask if you have an attorney, if you do, they will request the attorney’s contact information. Your insurance company will use the information you provide to determine if there is another party that is responsible for your medical bills and treatment. The information you provide will also let them know if you are planning to file a lawsuit against the other party. If there was another party that was responsible for your injuries, your medical treatment is their responsibility. Subrogation means that your health insurance company is requesting reimbursement from the at-fault party’s insurance company, even if they have already paid for your medical care in full, regardless of whether or not you have paid the premiums for the insurance coverage. If another party is liable, the insurance company will attempt to get their money back.

Subrogation is typically included as a clause in an insurance policy. If your policy does not specifically state that subrogation is permitted, your insurance company cannot file a claim. For this reason, it is extremely important that you fully read and understand the terms and conditions included in your insurance policy.

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