Understanding Subrogation in Florida Personal Injury Cases

Introduction

After a personal injury accident, victims often rely on their health insurance, auto insurance, or workers’ compensation to cover medical expenses. However, if the victim later recovers compensation from the at-fault party, the insurance company may seek reimbursement for the amounts it paid. This process, known as subrogation, can impact how much an injury victim ultimately receives in a settlement or court award.

This guide explains how subrogation works in Florida personal injury cases, when insurers can claim reimbursement, and what injured parties can do to protect their financial recovery.

What Is Subrogation?

Subrogation is a legal process that allows an insurance company to recover money it has paid on behalf of a policyholder when another party was responsible for the injury. Essentially, after covering medical expenses or other losses, the insurer steps into the policyholder’s shoes and seeks repayment from the at-fault party’s insurance or settlement funds.

Subrogation is commonly involved in:

• Car accident cases where health insurance or medical payments coverage pays for treatment before a settlement is reached
• Workers’ compensation claims when an injured worker later recovers damages from a third party
• Personal injury cases where a victim’s own insurance initially covers costs before liability is determined

Without subrogation, an injury victim could potentially recover twice for the same expenses—once from their own insurer and again from the at-fault party.

How Subrogation Affects Personal Injury Settlements in Florida

When a victim receives compensation in a personal injury case, their insurance company may file a subrogation claim to recover the amount it paid for medical expenses or other benefits. This means that part of the settlement or court award may go toward reimbursing the insurer rather than the victim.

For example:

• A driver is injured in a car accident and their health insurance covers $20,000 in medical bills.
• The at-fault driver’s insurance later agrees to a $50,000 settlement.
• The victim’s health insurance company may seek to recover the $20,000 it paid, leaving the victim with the remaining $30,000.

Because subrogation can reduce the final payout a victim receives, it is important to understand how to minimize its impact.

When Insurers Can and Cannot Enforce Subrogation Rights

Not all insurance policies automatically grant subrogation rights. Whether an insurer can claim reimbursement depends on the specific terms of the policy and applicable Florida laws.

Health Insurance Subrogation

Most private health insurance policies include subrogation clauses allowing the insurer to recover payments made on behalf of the insured. However, state and federal laws, such as the Employee Retirement Income Security Act (ERISA), may affect an insurer’s ability to enforce subrogation.

Auto Insurance Subrogation

Florida is a no-fault insurance state, meaning that personal injury protection (PIP) coverage typically pays for initial medical expenses after a car accident. Florida law generally prohibits PIP insurers from seeking subrogation against at-fault drivers, but medical payments coverage (MedPay) may be subject to subrogation claims.

Workers’ Compensation Subrogation

If an injured worker receives benefits through workers’ compensation but later recovers damages from a third-party lawsuit, the workers’ compensation insurer may have a right to reimbursement. However, the insurer must reduce its claim by a proportionate share of the injured worker’s attorney fees and costs.

How to Minimize Subrogation Claims and Maximize Your Settlement

Because subrogation claims can significantly reduce the final amount an injury victim receives, it is important to take steps to protect financial recovery.

Negotiate a Reduction of the Subrogation Claim

Insurance companies may be willing to accept a reduced repayment amount, especially if the victim’s total recovery is limited. An attorney can negotiate with the insurer to lower the amount owed.

Challenge the Validity of the Subrogation Claim

Some insurers attempt to assert subrogation rights even when they are not legally entitled to reimbursement. Reviewing the policy language and applicable laws can help determine if the insurer has a valid claim.

Use the Made Whole Doctrine When Applicable

Florida recognizes the made whole doctrine, which states that an insured party must be fully compensated for all losses before an insurer can enforce a subrogation claim. If the victim’s total damages exceed the available settlement, the insurer may not be entitled to reimbursement.

Factor Subrogation Into Settlement Negotiations

Understanding the potential impact of subrogation before accepting a settlement offer can help ensure that the final payout is sufficient to cover medical expenses, lost wages, and other damages.

How a Personal Injury Attorney Can Help

Subrogation can be a complex and frustrating issue for injury victims, but an experienced attorney can help by:

• Determining whether an insurance company has a valid subrogation claim
• Negotiating with insurers to reduce the amount owed
• Ensuring that subrogation does not unfairly deplete a settlement
• Protecting the victim’s rights under the made whole doctrine

At Bonderud Law, we help accident victims navigate the challenges of subrogation and maximize their financial recovery. If you have questions about how subrogation may affect your personal injury case, contact us today for a free consultation.

Conclusion

Subrogation allows insurance companies to seek reimbursement for expenses they paid on behalf of an injury victim, but it can reduce the final settlement amount the victim receives. Understanding subrogation laws, negotiating reductions, and applying legal defenses like the made whole doctrine can help protect a victim’s financial recovery.

If you are pursuing a personal injury claim and facing subrogation issues, consulting with an attorney can help ensure that you receive the full compensation you deserve.