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Subrogation Disputes over Personal Injury Recoveries


Even though you pursue a third party personal injury claim, you still have medical bills to pay before the claim is settled. Many people have their health insurance cover medical expenses while their case is ongoing. After all, they or their employers pay insurance premiums for the purpose of receiving health care, so they may as well benefit from the policy.

What is subrogation?

What many people do not realize is that health care insurance companies often seek reimbursement of medical expenses when injury victims receive a settlement or award through verdict. This practice is called subrogation. Subrogation used to be unheard of, but today it is common. However, the ethics of this insurance company practice has been in question ever since it began.

Wal-Mart v. Shank

One of the most notably unjust subrogation cases, called Wal-Mart v. Shank makes it clear why this practice is often questionable.

Through a car accident, Deborah Shank suffered paralysis and brain damage. Her ERISA plan paid medical expenses, which totaled approximately $470,000. When the insurance company sought subrogation, the court awarded it the whole $470,000, leaving the family with nothing from the recovery and no means of financially supporting her needs.

Fighting subrogation claims

If you receive a subrogation questionnaire from an insurance company, consult your attorney immediately for legal advice. Your response to a questionnaire can jeopardize your recovery and result in an insurance subrogation lien. A personal injury lawyer can carefully review your insurance policy for subrogation provisions, determine its enforceability, and help you fight a subrogation claim, if necessary.

Wells, Purcell & Kraatz is a personal injury law firm based in Fort Worth, Texas. Call (800) 882-4529 or contact us online.

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