- The Insurance company can recover money paid to you by another insurance company in some cases
- Subrogation means the “right to be paid back.”
- The insurance company does not have to give me notice they are entitled to be paid back in some cases. You are deemed to have notice by the policy language
- It is important to have experienced legal counsel to help you navigate the subrogation issues in any give case.
What is Subrogation?
Subrogation means, in legal terms, that an entity or company has the legal right to “step into the shoes” of another party and raise their claim for damages. There has been a trend the past 10 years to limit subrogation rights in many states. Subrogation rights are exercised by insurance companies against each other and often against their own insureds. The following are some of the ways subrogation may affect you if you are involved in an accident in the state of Nevada. http://clmmag.theclm.org/home/article/anti-subro-laws
Subrogation of Collision Coverage in Nevada
The most common claims that are subrogated by insurance companies are claims for property damage. When you are involved in an automobile accident, if you carry collision coverage on your vehicle, your insurance company will pay for damage to your vehicle immediately without regard to fault and without undue delay. If the accident is not your fault they will “subrogate“ all monies they have paid through the adverse driver’s insurance company. This means your insurance company will get paid back for damages they paid on your behalf including rental costs and cost of repair and towing. Often times clients do not want to use their own insurance for fear that it will raise their rates. If you are not at fault for the collision your rates should not be increased. The other insurance company will pay your insurance company back on the subrogation claim. Using your own insurance is beneficial to you because your insurance company has a fiduciary responsibility to treat you fairly and pay all damages to your vehicle or a fair and reasonable total loss settlement. The adverse insurance company does not have this duty to you and their goal is usually to pay and fix as little as possible. In addition, the adverse insurance company has no duty to timely or immediately repair your vehicle and can take weeks to investigate the claim before they even agree to pay your property damage. For this reason, we highly recommend that you carry collision coverage and rental coverage on your vehicle and use your own insurance to have your vehicle repaired when you are in an accident.
Subrogation of Medical Payments Coverage in Nevada
Not all types of claims may be subrogated. In Maxwell vs. Allstate Insurance Co., 102 Nev. 502, 728 P.2d 812 (1986), https://casetext.com/case/maxwell-v-allstate-ins-co ; the issue before the Court was whether Allstate’s subrogation rights were enforceable against their own insured. There was a clause in the Allstate medical payments policy called a subrogation clause. Since Maxwell had recovered from the adverse driver’s insurance policy, Allstate wanted their money back. Maxwell took the position that the medical payments subrogation clause in Allstate’s auto policy violated public policy and the Nevada Supreme Court agreed and found that it did violate public policy. http://ag.nv.gov/uploadedFiles/agnvgov/Content/Publications/AGO_2017-11..pdf
Based upon this case, Nevada is within a minority of states that will not allow subrogation of Medical Payments coverage. The court reasoned that a person is entitled to receive all the insurance coverages that he/she pays for under their policy. The Court held that it violates public policy to allow an insurer, which was Allstate in this case, to collect a premium for Medical Payments Coverage and then not provide that benefit to the paying insured.
The Court further found that Allstate was required to pay the benefit to which their insured had paid for and could not subrogate or collect this money back from the insured claiming the insured was receiving a “double recovery.” The Court held that allowing subrogation by the first-party insurer against the insured’s third-party recovery would be a windfall to the first-party carrier. The court recognized that often time’s injuries to their first-party insured were serious enough that recovery of both policies would be insufficient to compensate their inured. The court held Allstate’s subrogation clause was void as against public policy. http://nevadainsurancelaw.com/nevada-disallows-subrogation-firstparty-med-pay-carrier-insureds-thirdparty-recovery/
Medical payments coverage, is not fault-based. If you are driving your vehicle and you drive off the road, your med-pay coverage applies even if the accident is your fault. Medical Payments coverage also pays for the medical bills of every passenger in your vehicle at the time of the accident, regardless of fault. Each passenger has coverage up to your medical payments limits. If you have $10,000.00 in med-pay coverage, you and all passengers have $10,000.00 each in coverage. In the State of Nevada, there is no right of subrogation for medical payments coverage by the adverse driver.
Health Insurance Companies Rights of Subrogation
If you use health insurance coverage to pay for accident-related medical bills, your health insurance company will most likely have a “Right of Subrogation”. This means that if you receive money from the adverse driver’s bodily injury liability coverage, you must pay back your health insurance carrier for what they paid out on accident-related medical bills. Some health insurance carriers will require you to sign a Subrogation Agreement before they pay your medical bills. Using health insurance coverage on an auto accident claim is benfeical because of their negotiated rates that you do not get when using medical payments coverage. However, you can use both and maximize your coverages. You are only obligated to pay back your health insurance carrier what they paid out, not the full amount of your medical bills.
It is also important to note that Med-pay coverage is also not vehicle-specific. This means that it follows you and your family to protect them in any accident involving an automobile. It also applies to auto v. pedestrian accidents and accidents which occur when you are not in your own vehicle. If you are involved in an accident, and have multiple insurance policies, it is critical to contact legal counsel right away to maximize your benefits. Hospitals are ruthless at going after a Medical Payments policy and then billing you the difference even though they are required to bill your health insurance first.
Subrogation of Uninsured Motorist Coverage/Underinsured Motorist Coverage Benefits in Nevada
Subrogation also sometimes comes in the form of an Offset. If you use your med-pay coverage and UNINSURED MOTORIST COVERAGE or UNDERINSURED MOTORIST COVERAGE on the same accident claim, your auto insurance carrier will obtain an offset for med-pay coverage paid by them but only to the extent that they believe there is an excess recovery. This means that if you have a UNINSURED MOTORIST COVERAGE claim, which has a value of $20,000.00, and your insurance company pays $5,000.00 in med-pay coverage, they will offset the value of your claim by the amount of your med-pay coverage. On a $20,000.00 claim, they will only pay you $15,000.00. This concept of offset was created by Nevada case law. If your claim is worth $25,000, and your carrier pays $5,000 in med-pay benefits on your claim, your carrier will pay you $20,000, if your UNINSURED MOTORIST COVERAGE is above 15/30. It is important to point out that offset is subtracted from the value of your UNINSURED MOTORIST COVERAGE claim, and not simply from your UNINSURED MOTORIST COVERAGE limits. Offset also applies to UNDERINSURED MOTORIST COVERAGE claims. On UNDERINSURED MOTORIST COVERAGE claims, your carrier also gets a reduction for the adverse driver’s BI limits and offset for med-pay benefits paid from the value of your claim. https://law.justia.com/cases/nevada/supreme-court/1996/26854-1.html
If you have been in an accident and have question please don’t hesitate to contact our offices today. At my office, we are experienced in reviewing injury and property damage claims and coverages and all policies involved. Insurance companies never have the best interest of the injured person at the top of their priorities. They want to pay as little on every claim as possible. Having worked for an insurance company as an attorney for 9 years before opening my boutique law firm specializing in helping injured people, I reviewed thousands of auto accident claims and policy provisions.
At the Law Offices of Laura Hunt we are here to help you and your family in the event that accidents and tragedies occur. For any of your legal needs, do not hesitate to contact our offices. The Law Offices of Laura Hunt is a boutique, family owned law firm in Henderson that specializes in helping injured people and the community with legal issues involving auto accidents, wrongful deaths, slip and falls, truck accidents, injuries to children, bicycle accidents, dog bites, and all types of injury claims. Please do not hesitate to call us anytime you have a legal question or you or a loved one has sustained an injury at 702-450-(HUNT) 4868 and text 24/7 at 702-600-0032.