Do I need to respond to this subrogation letter?

March 22, 2022 2:10 AM

For the first time ever, I received what I've come to learn is a subrogation letter, and googling has somehow left me more confused. Apparently, there could be some sort of lawsuit at play? Is it in my best interest to respond or not respond?
posted by Forty-eight to Grab Bag (3 answers total)

Were I in your shoes, I'd engage a lawyer who specializes in insurance issues before making any decisions about what to do with the subrogation letter, and have all correspondence pass through that lawyer's office. If this is a situation where their claim against you would be handled by your insurance company, you should have your lawyer deal with your insurance company as well.

I know it's an expense, and likely not a minimal expense, but this is the sort of thing where not handling it well from the outset could lead to a financial repercussions that far exceed the up-front investment in legal services.

I have not been at the receiving end of a subrogation letter, but have recently been extricated from a multi-year issue where I was the person in the middle of a prolonged and very stupid battle between "my" insurers and a claims adjustment department of a multinational corporation, and I wish I'd just gotten a lawyer in the first place: it's where it ended up anyway, and it cost more to bring the lawyer in late than it would have if they'd gotten in early.
posted by Shepherd at 2:48 AM on March 22, 2022 [5 favorites]

I received a subrogation letter from my medical insurer (BCBS) after I received a settlement from the auto insurer of a person who ran me over when I was riding my bike. My lawyer at the time advised me to ignore it, because BCBS would recognize I had not been "made whole" by the payment from the auto insurer, and would not pursue the subrogation claim.

And he was right.
posted by jamjam at 3:34 AM on March 22, 2022 [1 favorite]

Depends on what's the issue.

Subrogation in insurance basically means "on your behalf".

Say someone crashed his car into yours. 100% his fault. Your own insurer, to make things easy on you, would pay you out of its pocket first, and in exchange, they will negotiate on your behalf against the other driver's insurer, and get repaid everything (medical costs, time off, repairs to vehicle, rental car, even your deductible) This thing, done on your behalf, is subrogation.

You can of course, refuse subrogation (sign a "waiver of subrogation"), which means you will handle the claim YOURSELF (or your attorney) by taking it up with their insurance company. But such things are NOT always in your interest (even if it's from your own insurance company) But definitely NOT from the other side's insurer. Also keep in mind that subrogation isn't always in your favor, esp. if you believe you deserve more but the accident "at fault" portion was a bit murky.

If you trust your insurance agent, ask him or her first. Else, retain a insurance speciality attorney that handles stuff like this just to ask a question. Most will give you a quick consultation (30 minute?) free and probably only charge 100 or 200 for something pretty simple such as reading a letter and advise you on your rights and best way forward.
posted by kschang at 7:03 AM on March 22, 2022