Michigan is a no-fault state for auto insurance. That 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.
But when another driver is liable for your damages, your insurer will attempt to recover the amount paid to you from the at-fault driver or their insurer This is referred to as subrogation. It’s a chance for auto insurers to recoup the funds they’ve paid out to their clients.
If you receive a subrogation letter from the insurer of the other involved party, a car accident attorney can explain your options. Insurance companies take advantage of those in need. But working with a lawyer can ensure you don’t hurt your claim or lose out on the compensation you need.
When Subrogation is Used
Subrogation doesn’t happen until after the settlement has been issued. Often, drivers don’t need to deal with subrogation at all. It’s often discussed only between the insurers. When opting to pursue subrogation, the insurer must inform you of the choice to proceed.
You may be asked to provide more details about the accident, such as documentation. And you might be able to get back your deductible if the subrogation works. Here’s how it works: The insurer covers your damages. Then, the insurer could decide to pursue subrogation against whoever is at fault for the accident. Then, it would work to recover the funds paid out for the settlement.
Liability and Waiving Subrogation
When the insurer looks into the accident, it’s to show fault. If you are found to be partially liable, the deductible you’d be able to get back would be reduced based on the percentage of blame you’re assigned. For instance, if you are found to be 10 percent liable for a $1,000 deductible, you could only receive 90 percent—or $900—back.
You should always discuss your settlement with your lawyer before signing anything. Insurers will often attempt to include a waiver of subrogation clause in the settlement agreement. If your insurer sees this clause, it could refuse to pay out on your claim. Those funds will become unrecoverable from the other driver’s insurer.
Reach Out to a Michigan Car Accident Lawyer
The laws about auto insurance and car accidents can be quite complex. If you aren’t trained in this area, you could get into trouble. The insurer will likely attempt to seize on this lack of knowledge to reduce their loss.
Our highly trained lawyers at Christensen Law are prepared to handle the insurer on your behalf. This enables you to focus on your recovery.