Subrogation Issues In Texas Insurance Law

October 14, 2009

Whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, or any other metroplex city, or in a smaller town such as Weatherford, Granbury, Cleburne, or Azle here is something that happens just about every day. An accident occurs because of someone elses negligent actions. Someone is injured and gets medical treatment. The medical treatment is paid for by the injured persons' health insurance, such as Blue Cross Blue Shield, Humana, Prudential, or any number of other health insurance companies. Maybe the medical care is paid for by the injured persons' own auto insurance company through the personal injury protection (PIP) benefits or med-pay benefits. Most property insurance like homeowners policys and commercial policys have some sort of med-pay that pays for injuries.

In most these cases, someone else, or someone else's insurance company is ultimately responsible for the injury that was incurred. The medical benefit that was used to pay bills is seldom going to pay all the bills. The injured person still has co-pays and deductibles to meet and sometimes there are caps on what is paid. Also, these medical benefits do not pay lost wages or anything for pain and suffering or anything for impairment or disfigurement or scarring that may have resulted from the injury. As a result of these other losses, even the person who does not want to "sue" anybody has to make a claim against the responsible people and their insurance company to recover all their losses.

When the injured persons' insurance pays for a loss that was ultimately the resposibility of the other person or the other persons' insurance, the injured persons' insurance has a subrogation right to the monies received from others. In other words, the injured persons' insurance has to be paid back and there is no legal, double recovery.

In the car insurance scenario, Texas Insurance Code, Article 5.06-1, creates a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured motorist benefits the insurance company makes to its customer. It says that if an insurance company makes a payment to any person under this coverage, the insurer is entitled to recover up to the amount of the payment from the proceeds of any judgment or settlement with the person.

In the health insurance situation, this is found in Texas Insurance Code, Section 1506.301. For property and casualty insurance, this law is found in Article 21.28-C.
This subrogation right also applies to Workers Compensation Laws, Veterans Benefits, Medicare, and Medicaid, and dozens of other situations.

What is important to realize here is two things; 1) that these laws exist and if they are not properly taken into account it can cost the injured person even more, and 2) an experienced Insurance Law Attorney can handle these situations for you and often times defeat the law requiring that the monies be repaid or atleast reduce the amount that has to be paid back to the entities.