Subrogation
Subrogation is a legal process that allows your insurance company to seek repayment from the person who caused your losses. In simple terms, if your insurer pays your bills after an accident, it can later try to recover that money from the at-fault party or their insurance company.
For example, if you’re in a car accident in Colorado and your insurance pays for your medical care, your insurer may later demand reimbursement from the driver who caused the crash. This way, the person responsible for the damage ultimately pays, not your insurance company.
Subrogation frequently arises in various personal injury and related cases, including those involving property damage and workplace accidents. Learning about it here can help you know what to expect after your claim is resolved and how it might affect your settlement.
How Subrogation Works in Colorado
Colorado law recognizes subrogation as a fair way to make sure people don’t get paid twice for the same losses. It also prevents insurance companies from paying for damages caused by another person.
Here’s a simple breakdown of how it usually works:
- Your insurer pays your expenses: For example, your health and car insurance companies cover your medical bills and repairs after an accident.
- You make a claim against the at-fault party: You and your attorney pursue compensation from the person who caused the accident.
- Your insurer seeks reimbursement: If you receive a settlement or court award, your insurer may claim part of it to recover what it already paid.
Colorado follows a rule called the “made whole” doctrine. This means your insurer can’t demand repayment until you’ve been fully compensated for all of your losses. In other words, you come first, not the insurance company.
Types of Subrogation
There are a few ways subrogation can happen in Colorado, depending on your situation:
- Contractual subrogation: This is written into your insurance policy and gives your insurer the right to recover its payments.
- Equitable subrogation: This happens when a court allows repayment as a matter of fairness, even if it’s not spelled out in a contract.
- Statutory subrogation: Certain Colorado laws, such as those governing workers’ compensation, specifically grant insurers subrogation rights.
Regardless of the type of subrogation in question, the goal remains the same: to allow the insurance company to recover money from the person or party that caused the loss.
An Illustrative Example of Subrogation in a Personal Injury Case
To see how subrogation works in practice, consider this example:
Imagine you’re driving in Denver when another driver runs a red light and crashes into you. Your health insurance covers $40,000 in medical bills, and your auto insurer pays $10,000 to fix your car. Later, you file a personal injury claim against the at-fault driver and their insurance company, who eventually agree to a $100,000 settlement.
Since your insurers already paid part of your losses, they may each have a subrogation claim to be repaid from your settlement. However, under Colorado’s made-whole doctrine, as mentioned above, your right to full compensation comes before theirs. That means your attorney can often negotiate to ensure your economic and non-economic damages are covered first.
In practice, your lawyer might be able to reach an agreement where your health insurer accepts $25,000 instead of $40,000 to resolve its subrogation claim, leaving more of your settlement in your hands. However, the eventual outcome will ultimately depend on all of the facts and circumstances of your case.
Can Subrogation Be Waived?
Sometimes, yes. Insurance policies or contracts can include a waiver of subrogation, which prevents insurers from seeking repayment. For example, these clauses are standard in business and construction agreements.
However, before signing any document with this type of clause, you should talk to a lawyer. Waiving subrogation might limit your insurer’s rights (or yours) later on.
Contact a Denver Personal Injury Lawyer at Zaner Law Personal Injury Lawyers for a Free Consultation
Subrogation can be complicated, and it often surprises people after an accident settlement. If your insurer paid your medical bills and other expenses, they may try to collect part of your recovery later.
A knowledgeable Denver personal injury attorney can review your policy in detail, explain your legal rights, and negotiate with the insurer to make sure you keep as much of your settlement as possible.
If you have questions about subrogation or your insurance company’s claim, contact Zaner Law Personal Injury Lawyers today for a free consultation at (720) 613-9706.
