If you have been injured in a car accident or other personal injury case, you may hear the term “subrogation.” At the Bottaro Law Firm, LLC, we have decades of combined experience winning personal injury cases throughout Rhode Island and Massachusetts. Personal injury law is all that we do, with a focus on car accident law.
Subrogation, in the context of personal injury, refers to another company’s right to be repaid from a legal settlement money it has previously paid out on the injured person’s (your) behalf.
Why is subrogation important? Subrogation, and how your personal injury lawyer deals with it, may hurt your case – or, help you recover thousands of dollars more!
What Is PIP Subrogation After A Mass. Car Accident Personal Injury?
The example we will use today refers to if you have been injured in a Massachusetts car accident and have personal injury protection (“PIP”) benefits. Similar principles apply for a Rhode Island car accident. In both cases, it is important that you call or text us for free immediately after a car accident so that we can give you advice specific to the facts of your personal injury!
After a Massachusetts car accident with personal injuries, subrogation can apply to where a PIP auto insurer is entitled to reimbursement where another party is responsible.
If you are injured in an auto accident as either a driver or passenger in a Massachusetts-insured vehicle, you can file a claim for Personal Injury Protection (PIP) benefits with the auto insurance company that insures the vehicle (the PIP carrier). The PIP carrier may provide you up to $8,000 in benefits to pay for your medical bills and 75 percent of your lost wages.
When you later pursue a bodily injury (BI) claim against the auto insurance company that provides coverage for the negligent driver that caused the accident (the BI carrier), you can seek compensation for any medical bills and lost wages you incurred as a result of the injuries caused by the other driver’s negligence. The PIP carrier will then pursue a subrogation claim against the BI carrier to recover any PIP benefits they paid.
Let’s use an example. You were in an accident and received $8,000 in PIP benefits. If the BI carrier provides $50,000 in coverage for the accident but the value of your bodily injury claim is less than that (let’s say $30,000), the BI carrier will reduce the value of your settlement by the $8,000 in PIP benefits that were paid toward your medical bills and lost wages. This is referred to as a “PIP offset.” The purpose of the offset if to prevent injured parties from receiving compensation for medical bills or lost wages for which they have already been compensated. Moreover, the BI carrier is still required to reimburse the PIP carrier for any PIP benefits paid to satisfy the PIP carrier’s subrogation claim.
The results are different, however, if the value of your case if worth the available policy limits or more. Let’s say instead that the value of your case is the full $50,000 policy limits provided by the BI carrier. In this case, the BI carrier will not take a PIP offset and reduce the value of your settlement.
Why? Under Massachusetts law, the BI carrier only has to pay up to its policy limits, irrespective of whether it is used to compensate you or reimburse the PIP carrier. Therefore, if you settle your bodily injury claim for the policy limits, neither you nor the bodily injury carrier has a duty to reimburse the PIP carrier for the PIP benefits it paid out.
Interestingly, under this scheme, the BI carrier has little incentive to reimburse the PIP carrier as opposed to paying policy limits to an injured person where the value of the case is close to the policy limits.
My hope is that in reading today’s blog, you can see how important the concept of subrogation is to your third party personal injury claim. Additionally, this can be quite confusing and complex. At the Bottaro Law Firm, LLC, we are here to help!
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At the Bottaro Law Firm, LLC, we handle all types of personal injury cases such as car accidents every day. Honesty. Integrity. Results. Our experienced legal team is here to fight for your rights. Contact us in any method you prefer 24/7 for a fast, free, and confidential consultation about your case. Text or call: 401-777-7777 or fill out our free and confidential online form.