Question around subrogation claim and signing a release from at fault drivers insurance

[lochness1988]

I was involved in a car accident in Texas where the other driver was at fault. They had a 30/60k bodily injury policy, and we've hired a personal injury attorney who is pursuing the 30k policy. My spouse is allocated to receive 18k, and the rest is going to myself.

Our attorney is asking us to sign a "Release of All Claims and Hold Harmless Agreement" for this settlement. There is a clause in the agreement stating that we must assume all responsibility for any liens or subrogated claims, including a subrogation claim of 100k. If we sign, are we fully responsible for paying the 100k subrogation claim, even though my spouse's settlement is only 18k? We need clarification on the implications of this agreement. He asked us to sign this but it makes no sense if we are going to have to somehow be in DEBT and responsible for the subrogation. Can someone please explain how this works and if it sounds like our attorney is acting in our best interest?

 

[Zigner]

What did your attorney say about this when you asked for additional clarification?

(Random strangers on the internet are not in the position to comment intelligently on this.)

 

[lochness1988]

We did and from what he said, the medical insurance company can ONLY collect from the settlement money entitled to my spouse, so if there is a 100k subrogation, and my spouse gets 18k, they will swallow up and take the whole 18k but they can not and will not go after us to get the rest of the remaining amount.. When we read the release form, and pasted the above paragraph, it was unclear to us and started raising questions. We also posted here to get a second opinion

 

[adjusterjack]

You're right. It doesn't make sense.

30/60 BI means 30k per person, 60k per accident. Which for two people it's a maximum of 30k each.

A portion of 30k is allocated to your spouse whatever her claim is worth.

A portion of another 30k is allocated to you whatever your claim is worth.

When you say she gets 18k and you get the rest. The rest of what?

As for a $100,000 subrogation claim. From where? What typically happens is that medical insurers are entitled to reimbursement for money they paid out for medical treatment. If medical insurance was not involved then your medical providers, if they have not been paid, have liens on your claim for their charges.

But that doesn't explain where the $100,000 comes from.

Were you both injured in the accident? What were the total bills for each of you? That would be separate claims and the insurer would have liens on each.

What typically happens is that the lawyer collects the money, takes his fee off the top, pays the liens on each claim, and you and your wife get the rest.

In many personal injury claims the lawyer negotiates written lien waivers or compromises before you settle, which is something you should be insisting on before you sign anything.

Bottom line, if there isn't enough money to cover the medical insurance liens and the lawyer's fee, your option is to continue pursuing the claims and/or consider invoking your Underinsured Motorists coverage, which your lawyer can also handle.

Looks like your lawyer has a lot of explaining to do.

 

[adjusterjack]

(Random strangers on the internet are not in the position to comment intelligently on this.)

Really, Zig. What am I, chopped liver? LBNOL.

 

[lochness1988]

Just to be clear, there was passenger in the vehicle passed away that is getting 30k for the wrongful death. that is where the other 30k is. The other 30k is going to me and my family

 

[lochness1988]

My question is: if there is $100k in subrogation and my spouse receives $18k from the settlement, can her employer-sponsored medical insurance legally come after our personal assets for the remaining amount based on the wording in the release of claims provided by the at-fault driver’s insurance?

 

[adjusterjack]

Just to be clear, there was passenger in the vehicle passed away that is getting 30k for the wrongful death. that is where the other 30k is. The other 30k is going to me and my family

Oh, OK. That clears that up.

My question is: if there is $100k in subrogation and my spouse receives $18k from the settlement, can her employer-sponsored medical insurance legally come after our personal assets for the remaining amount based on the wording in the release of claims provided by the at-fault driver’s insurance?

No, I wouldn't think so. Generally, the lien only applies to the settlement money.

But you should read her medical insurance plan for the section that addresses the right of reimbursement.

That still doesn't explain the $100,000.

 

[lochness1988]

the 100,000 subrogation is because my spouse got seriously injured and that is what my spouse's medical insurance paid and they want to get reimbursed for

 

[adjusterjack]

the 100,000 subrogation is because my spouse got seriously injured and that is what my spouse's medical insurance paid and they want to get reimbursed for

Somebody should be talking to the medical insurer about waiving reimbursement or compromising the lien. And somebody should be talking about using your Underinsured Motorists coverage if there are sufficient limits.

Otherwise, it seems that you and your wife get nothing if the medical insurer and the lawyer take it all.

Something is still not making sense here. Go talk to the lawyer. Get this explained before anybody signs anything.

 

[lochness1988]

Currently, our attorney is telling us that the made-whole doctrine does not apply and that most employer-sponsored plans override it in their contracts. Therefore, if the subrogation amount is $100,000 and my spouse receives $18,000, they would be able to take the entire amount, which means negotiating is unlikely to be effective. My spouse also has a hospital lien for an unpaid bill (not a subrogation claim) in the amount of $2,000. The attorney stated that even if we negotiated this down and saved $800, it would not matter because that amount would ultimately be absorbed as part of the subrogation claim.

To our knowledge, the attorney has not yet negotiated the $100,000 subrogation claim. The attorney has also informed us not to be concerned, stating that the most they would ever be able to collect is the $18,000 (plus whatever he ends up getting for my spouse under my own UIM policy), since this is the total settlement amount.


Additionally, I want to mention that the attorney has not yet started the process of pursuing my UIM policy. The attorney stated that when a UIM claim is made, whatever amount my spouse is entitled to would also be taken in full to satisfy the subrogation claim (100k).

With all this detail, i also want to reiterate, we are being asked to sign a release of all claims form from the at fault drivers insurance . Is there anything i should be concerned about in this release form or something that we need to do in order to cover my family so we don't put ourselves in a position where the health insurance comes back to us later and says you still owe us money and demand more money so we fill secure to sign the release.

I appreciate your help.

 

[adjusterjack]

Personally, I would not settle until

1 - The attorney deals with the $100,000 subrogation and gets something in writing from the insurer.

2 - The attorney makes the UIM claim and gets a commitment from your insurance.

Keep in mind that he gets no money until you and your wife settle. Once he gets paid he can throw up his hands and say "Sorry, can't do anything else" and there won't be anything you can do about it.

But that's just me and my cynical approach to injury attorneys.

By the way, what is your UIM limit?

 

[lochness1988]

Our UIM coverage is only 30/60, so $30,000 goes to the wrongful death claim, and the remaining $30,000 will be distributed among my spouse, my children, and me.


The main reason for posting here comes down to the subrogation claim and protecting our family. We understand that the at-fault driver has a minimum-limits policy, and we also know that our UIM coverage is minimal. We know this will never make up for the damages we have suffered. Our primary concern is ensuring that, by signing the release—one that appears broad but that our attorney has said is acceptable—we are not exposing my spouse to any obligation to pay money beyond what is included in the settlement. Since it isn’t exactly spelled out in the release and is broad we are trying to understand if this is even something that is reasonable to happen or we are just overthinking this

And thank you for your time

 

[Zigner]

Really, Zig. What am I, chopped liver? LBNOL.

I guess I should have leaned into the fact that the OP is represented.