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Medical insurance seeking portion of personal injury settlement

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MikePR

Junior Member
What is the name of your state (only U.S. law)? TN

I was involved in an auto accident over a year ago (where I wasn't the at-fault driver) and with a high amount of medical bills ($20,000+) my medical insurance paid the entire amount; and now with the settlement process they are seeking reimbursement percentage for that amt...Which means instead of me & my lawyer splitting the check, it's me, my insurance company, and the lawyer...However, in the state of TN is that the proper course of action?
 


Zigner

Senior Member, Non-Attorney
What is the name of your state (only U.S. law)? TN

I was involved in an auto accident over a year ago (where I wasn't the at-fault driver) and with a high amount of medical bills ($20,000+) my medical insurance paid the entire amount; and now with the settlement process they are seeking reimbursement percentage for that amt...Which means instead of me & my lawyer splitting the check, it's me, my insurance company, and the lawyer...However, in the state of TN is that the proper course of action?
Of course it is proper. The term you are looking for is subrogation. In fact, the insurance company should be paid IN FULL before anybody gets anything else.
 

justalayman

Senior Member
Of course it is proper. The term you are looking for is subrogation. In fact, the insurance company should be paid IN FULL before anybody gets anything else.
actually subrogation is what would allow the insurance company to seek recompense directly from the injured party.

This is simply a reimbursement of payments made by the insurance company.



Mike, does any part of your claim against the at fault party includes things like medical costs? If so, who paid those medical costs?
 

Zigner

Senior Member, Non-Attorney
actually subrogation is what would allow the insurance company to seek recompense directly from the injured party.

This is simply a reimbursement of payments made by the insurance company.
The lien on the settlement (that's what is in play here) is a part of the subrogation process.
 

justalayman

Senior Member
The lien on the settlement (that's what is in play here) is a part of the subrogation process.
but subrogation is a specific action that allows them to seek recompense from a 3rd party on behalf of their beneficiary. The insurance company is taking no action against the 3rd party so it is not an act of subrogation. It is merely seeking recompense from their beneficiary because their beneficiary is being paid for a claim they have made for damages due to medical expenses.

In other words: the injured party cannot utilize the benefits of their insurance company AND be paid for those medical costs by the at fault party. Any money paid to the injured party to compensate them for costs incurred for anything the insurance company actually paid belong to the insurance company.

Utilizing the benefits of the insurance company AND being compensated for those expenses (and keeping it) from the at fault party would be double dipping.

from the FA wealth of knowledge:

What Are Subrogation Rights?


To understand what subrogation rights are, it is best to start with an example. When an insurance company pays out benefits to you in a situation where the other party caused the accident in question, you must subrogate your rights to the insurance company. This means you give the insurance company the legal right to sue the person who caused the accident to recoup the money paid to you for the damages.

beyond that though; if the settlement is not intended to compensate the injured party for medical expenses paid by the insurance company, the insurance company would have no claim to any of the settlement money. It's a game played in how the demand is made that makes it so the insurance company does not have a right to make a claim against a negotiated settlement.

If this went to court and the court specified the award would be $XXXXX. for medical expenses, then the insurance company would have a right to make a claim to that money. Any compensation made specifically for pain and suffering or other damages would not be rightfully claimable by the insurance company as that portion of the award is for a specific reason.
 
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JustAPal00

Senior Member
OP, that is the way it works. I don't think it's right, but the insurance company is entitled to their cut. The lawyer should negotiate a lower rate before they are paid. If the lawyer is taking 33%, I could see the medical bills being lowered by at least that percent.
 

ecmst12

Senior Member
You have it backwards. The insurance company CAN NOT pursue the 3rd party directly. Subrogation is attaching the settlement OP receives from the 3rd party; however if OP decided not to sue, the health insurance would have no recourse.

It's different with auto insurance; if you use collision coverage for an accident that was not your fault, you ASSIGN your right to sue to your insurance company so they can recover. That is spelled out in your policy document.
 

justalayman

Senior Member
=ecmst12;2836943]You have it backwards. The insurance company CAN NOT pursue the 3rd party directly. Subrogation is attaching the settlement OP receives from the 3rd party; however if OP decided not to sue, the health insurance would have no recourse.
I would have to question the claim that the insurer does not have the right to take independent action but that is another argument for another day.



anyway, I'll accept you are correct on this so let's move on.


OP, ask your attorney to research the "Made Whole Doctrine" to see if and how it may apply to your situation.. It may prevent any claim by the insurance company.

a little background for your state:


Wimberly v. Am. Cas. Co. of Reading, Pa.., 584 S.W.2d 200 (Tenn. 1979); York v. Sevier County
Ambulance Auth., 8 S.W.3d 616 (Tenn. 1999); Abbott v. Blount County, 207 S.W.3d 732 (Tenn. 2006)
 

Zigner

Senior Member, Non-Attorney
You have it backwards. The insurance company CAN NOT pursue the 3rd party directly. Subrogation is attaching the settlement OP receives from the 3rd party; however if OP decided not to sue, the health insurance would have no recourse.

It's different with auto insurance; if you use collision coverage for an accident that was not your fault, you ASSIGN your right to sue to your insurance company so they can recover. That is spelled out in your policy document.
Actually, not only do they have the "right" to seek compensation, one is bound, contractually, to assist the insurance company if it decides to pursue compensation from the 3rd party.
 

MikePR

Junior Member
Thanks to everyone for your help/advice! I appreciate it and I understand, I just wanted to obtain others' opinion especially since the settlement offer is mainly to cover my medical expenses and not my personal injury (pain & suffering, etc.) but it's FOR my pain & suffering.
 

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