How Long Do You Have To Respond to a Subrogation Letter?
Insurance companies are extremely fond of collecting premiums from their customers but what they’re not fans of is paying out benefits. There might come a time when you need to file a claim with your insurance company to get reimbursed for medical expenses or car repairs as a result of an accident. After you get paid by your insurance company, they will seek a way to get that money back. That is when a subrogation letter is generated and sent to all the involved parties. How long do you have to respond to a subrogation letter if you get one?
A Timely Response
How quickly you need to respond to a letter of subrogation depends on who is receiving the letter. If you are the victim of an accident that wasn’t your fault, the letter of subrogation is a record of what the insurance company intends to do next. Until they get paid for the money they paid you, they consider the claim as still open. That means you should be kept informed about the progress.
On the other hand, if you were found at fault in the accident, then the letter of subrogation puts you on notice that the victim’s insurance company is going to seek compensation from your insurance company. If you did not have insurance at the time of the accident, then the insurance carrier will be seeking that compensation directly from you.
In either case, you need to send a response acknowledging the receipt of the letter as soon as possible. That letter of subrogation is something your attorney should respond to on your behalf.
Understanding Subrogation
Subrogation is defined as “the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.” That is a fancy way of saying that when it comes to getting reimbursed for an accident, your insurance company wants their money back. According to the Insurance Information Institute, in 2022, insurance companies incurred losses of $242,930,943. That is a lot of money that insurance carriers would like to get back.
Consider this scenario: You get into a car accident that wrecks your ride and sends you to the ER. After that, you file a claim with your auto insurance carrier that covers your out-of-pocket expenses. That makes you “whole.” Your insurance company will want to get their money back by going after the at-fault person’s insurance company. That process begins with a letter of subrogation sent to you.
You’ll want to discuss the contents of your letter with a Reno attorney who understands how insurance works. You and your attorney will want to send a response as quickly as possible to lock in your position. That will have a direct impact on any future claims.
The Double Dip Theory
At the heart of subrogation is the “double dip” theory. That means you can’t get paid twice for the same expenses. For instance, if you get reimbursed for a total loss of your car from your insurance company, you can’t turn around and sue the person who caused your accident for those losses without paying back your insurance company.
Although in one scenario, you might have to reimburse your insurance company if you receive compensation, there is another scenario where you would benefit from subrogation. The money your insurance company receives from the third-party might cover your deductible. In that case, you would get those funds from your insurance company.
It is essential to note the differences between auto insurance and health insurance policies as they relate to subrogation. Your auto insurance policy could pay a certain amount of medical expenses. However, those are not subject to subrogation. On the other hand, if your medical expenses are covered by a health insurance policy, then that carrier can seek reimbursement. The Nevada subrogation laws spell out how insurance companies can retrieve their funds.
Making the Case
Any letter or notification from an insurance company relating to an accident requires a response. The Law Office of Matthew Sharp understands how vital it is to provide a timely response to any notice from an insurance carrier in order to move a claim along. If you receive a letter of subrogation, you’ll want to contact our offices as soon as possible so that together, we can formulate the correct response.
The At-Fault Issue
The advantage of having subrogation laws in place is that it means your insurance company will be more inclined to pay your claim quickly, knowing they will be able to get that money back. The only complication is determining who is at fault for the accident.
For instance, if you are found to be 10% at fault for the accident, and the final award is $50,000, you would only receive $45,000. That is another reason why you want to involve the services of an attorney who knows how to build an effective case to determine fault in the aftermath of a serious car accident.
If you are not at fault for the accident, the claims process will proceed without complications. Nevada is a comparative negligence state. That means you need to be less than 50% at fault for the accident in order to recover losses. The amount of those losses corresponds to the level of fault.
