What is Subrogation in a No-Fault Claim?

Michigan is a no-fault state for auto insurance, which means you’ll need to carry personal injury protection (PIP) coverage on your auto insurance policy. In the case of a car accident, you’ll file a claim through your own insurer. PIP coverage will cover your medical expenses and lost wages up to the limits of your policy.

However, when another driver is liable for your damages, your insurance company will attempt to recover the amount paid to you from the at-fault driver or their insurance company. This is referred to as subrogation. It’s an opportunity for auto insurance companies to recoup the funds they’ve paid out to their policyholders.

If you receive a subrogation letter from the insurance company of the other involved party, an experienced car accident attorney can help explain your options. Insurance companies are notorious for taking advantage of those in need, which is why working with a lawyer can ensure you don’t hurt your claim or lose out on the compensation you need for recovery.

When Subrogation Is Used

Subrogation doesn’t happen until after the settlement has been issued. Typically, drivers don’t need to deal with subrogation at all, as it’s usually discussed directly between insurance companies. When opting to pursue subrogation, the insurer will be obligated to inform you of the decision to proceed.

You could be expected to provide additional information about the accident, including documentation. And, you might be able to recover your deductible if subrogation is successful. Here’s how it works: the insurance company covers your damages. Then, the insurer could decide to pursue subrogation against whoever is at fault for the accident, and then work to recover the funds paid out for the settlement.

Liability and Waiving Subrogation

When the insurance company investigates the accident, it’s to establish fault. If you are found to be partially liable, the deductible you’d be able to recover will be reduced based on the percentage of blame you’re assigned. For example, if you are found to be 10 percent liable for a $1,000 deductible, you could only receive 90 percent—or $900—back.

It’s important to note that you should always discuss your settlement with your attorney before signing anything. Insurance providers will often attempt to include a waiver of subrogation clause in the settlement agreement. If your insurance company sees this clause, it could refuse to pay out on your claim, as those funds will become unrecoverable from the other driver’s insurance company.

Reach Out to a Michigan Car Accident Lawyer

The laws surrounding auto insurance and car accidents can be quite complex and difficult to understand,  if you aren’t trained and experienced in this area. The insurance company will likely attempt to capitalize on this lack of knowledge and take advantage of you to reduce their financial loss.

Our highly trained attorneys at David Christensen Law are prepared to handle the insurer on your behalf, which enables you to focus on your recovery.

We proudly offer our prospective clients a complimentary case review to discuss the initial details of your case. You can schedule yours today by calling our office at 248-213-4900, or by filling out the convenient contact form at the bottom of this page.