Subrogation is a legal doctrine that permits an insurance company or others paying the injured person’s medical or other bills to seek reimbursement from the person or company legally responsible for causing an accident. Subrogation most often takes place after the innocent driver’s insurance company has already paid its insured for personal injuries and/or vehicle damage.

For example, if another person causes an accident that involves property damage to your vehicle and your own insurance company pays for the property damage, your company then has the right to seek reimbursement from the insurance company for the person who caused the accident. If the person who caused the accident has no insurance, your insurance company may seek reimbursement directly from the person who caused the accident.

Some motorists in Pennsylvania select lower limits of medical coverage or even the state minimum of $5,000, based on the rationale that they have health insurance to pay the medical bills. Even if you have good health insurance, it is important to have high limits of no-fault medical benefits on your motor vehicle policy. In many cases, under Pennsylvania and federal law, health insurance companies have subrogation rights and are permitted to place a lien (a legal claim) on personal injury settlements. This means that they have the right to obtain reimbursement for medical benefits they paid for treatment related to injuries suffered in a motor vehicle accident.

For example, HMOs and most self-funded ERISA health plans have the legal right to assert a lien and seek reimbursement for benefits paid by the health insurer for injuries suffered in a motor vehicle accident. By contrast, your car insurance company is not permitted by law to seek subrogation or assert a medical lien for medical payments made under your first-party medical coverage on your car insurance policy.

For this reason, it is very important that you, as a motorist in Pennsylvania, carry higher limits for first-party medical benefits on your automobile insurance policy. By carrying higher limits, you ensure that your car insurer will pay the medical and hospital bills associated with your car accident, and the bills will not be paid by your health insurer.

We highly recommend that you purchase at least $100,000 in medical benefits to adequately protect you and your family in the event that you are injured in a serious car accident. This will ensure that all of your bills will be paid by your own car insurance company and will not be paid by a health insurance company, which may then seek reimbursement from your personal injury settlement or verdict.

It is important for you to consult an experienced personal injury attorney to determine whether there will be any issues of subrogation in your personal injury case. In many cases, an experienced personal injury lawyer may be able to contest or negotiate a reduction of the subrogation lien.