Maximizing Your Subrogation

What are some ways to maximize the amount of money that goes into YOUR pocket, when YOUR insurer wants to be reimbursed out of your settlement or judgment?

  • What is the “Made-Whole Doctrine” and How Does it Work?

In Colorado, The Made-Whole Doctrine states that subrogation will not be allowed unless you are first “made whole” for all of your damages from your case. In many cases, an insurance company cannot pursue subrogation at all until the individual has received full compensation for all of his or her damages.  Proper utilization of the Made-Whole Doctrine can result in a waiver by the insurance company of its entire right to reimbursement vastly increasing your recovery.  The requirements on how to use this law are very specific. Make sure your attorney knows how and when to use this law to your benefit, and if it applies to your specific case and insurance plan.

  • What is the “Common Fund Doctrine” and How Does it Work?

In Colorado, The Common Fund Doctrine requires your health insurance company to reduce the amount of its right to reimbursement in an amount equal to your attorney’s fees. If you are paying a 1/3 attorney’s fee, and your insurer has requested reimbursement, they may be required by Colorado Law to reduce the amount that they are demanding by 1/3 plus expenses that were incurred in the course of procuring the settlement or judgment of your claim. Make sure your attorney knows how and when to use this law to your benefit, and if it applies to your specific case and insurance plan. 

What is Subrogation?

When you have been injured in an accident and your health insurance company pays out money on your behalf so you can get the treatment you need for your injuries, something called subrogation will occur in your case.

Subrogation means that one person or party (your health insurer) stands in the shoes of another (you). If your insurer has a right to subrogation, your insurer is permitted to collect the money that it paid out for your accident related medical care from your settlement or judgment. In short, your health insurance company has a right to be reimbursed. If you have health insurance of any type and you plan to use or are using it for care related to your case, the question you should be asking yourself is, “Does my health insurance company have a right to be paid back out of my settlement; and if so, should the insurer be paid back in full, in part, or even at all?” Without proper representation, the insurer will not tell you. The insurer will simply demand reimbursement in full, which may be against Colorado and/or Federal Law.

Here is an example, Sarah was injured in a motor vehicle collision. She has health insurance, and her health insurance paid for the medical treatment that she received as a result of the motor vehicle collision. Sarah receives a settlement from the at-fault party’s insurance company. Once she settles, her health insurance claims may be entitled to a portion of her settlement in the amount her medical insurance paid for her treatment. Sarah’s health insurance is claiming a right to subrogation and is demanding reimbursement. Sarah needs to know how much her insurer should be paid. Only an experienced attorney who understands complex and ever changing subrogation and insurance law can determine how much that health insurer should be paid back, if anything.