Making the Most of Your Own Insurance Coverage While Enhancing Your Final Settlement
We previously discussed that procuring and utilizing medical payment coverage is a clear benefit. What many people do not know is that under Indiana law, any insurer who pays the bills for an injured party has the right to recoup (at least some of) those payments out of a settlement with or verdict against an at-fault driver. This repayment obligation kicks in only if you have obtained a settlement or favorable verdict, which means you owe nothing back if you do not have a viable claim. The insurer’s right to be paid back falls under the broad scope of the term known as “subrogation.”
Some of those issues can become quite complex (concerning certain employer funded health insurance, or government based programs such as Medicare or Medicaid). We will touch on more complicated issues in later articles. However, the Medical Payments subrogation is a common one we have to account for in most auto accident cases.
Indiana law specific to medical payments subrogation preserves the entire right to bring the claim with the injured party. This means that (except for rare circumstances) your insurer cannot seek to recoup the medical expenses they paid directly from the other driver’s insurance. There are advantages and obligations which arise from this law. On the one hand, being able to submit the third party claim for the full medical expense as part of your claim can increase the total third party settlement value. On the other hand, subrogation entitles your automobile insurer to reimbursement of out of the settlement. The trade-off is worthwhile, however, and can ultimately increase your in-pocket recovery, by forcing your insurer to share a small portion of the legal fees and claim costs in order to get their own payments reimbursed.
When determining the amount to repay, not only must your insurer account for the cost you incur in presenting the case (primarily legal fees and certain court costs), but they must also account for other factors which might affect the value of your claim, such as comparative fault or whether or not there was enough insurance to cover all of your injuries.
While we always work to fairly pay back those insurers who have a legal entitlement to recoup a portion of those costs, we will also work hard to make sure that such payments are fair for our clients as well.
For more information, please see Indiana Code 34-53-1-1
Attorney Tip: Occasionally we encounter an out-of-state insurer who seeks to circumvent the statutory sharing of pro rate attorney fees by making a first party reimbursement claim. It is important to realize that the insurer is not authorized to do so directly, and doing so is, in fact, illegal in Indiana. Do not let the insurer get away with this tactic, as they are infringing on the rights of your client.