Health Insurance Claims on Personal Injury Settlements

August 26, 2022

If you sustain an injury caused by the negligent actions of another individual or entity, there is a good chance you will be able to recover compensation for your losses. Sometimes, this compensation comes from the party’s insurance carrier, but it may also happen through a personal injury jury verdict.

In the meantime, it may be necessary for injury victims to use their own health insurance to pay for their medical bills. After a settlement or jury verdict is rendered, the insurance carrier will typically have the right to recover part of that compensation for the money they put into the medical treatment so far.

Understanding Subrogation for Health Insurance Carriers

Individuals often turn to their own health insurance carrier to handle medical payments after they sustain an injury. This is true even if another party causes the injury. Why would a person have to turn to their own insurance if someone else caused their injury?

The reality is that recovering compensation from an at-fault party after an injury occurs can be a time-consuming process. Regardless of whether or not a person expects to receive compensation through an insurance settlement or as a result of a personal injury trial verdict, the process could drag on for months or even years. However, the injury victim does not have months or years to wait to receive medical care.

After an injury occurs, individuals typically need emergency medical care as well as ongoing care as needed. When this happens, the only way a person may be able to cover these expenses is to turn to their own personal health insurance carrier.

The Health Insurance Carrier Will Want Money Back

A subrogation clause is often written into health insurance policies is. It is only fair for insurance carriers to expect to be repaid if they cover expenses up front for a person’s injury, particularly if that person goes on to recover a settlement or jury verdict that covers all their expenses. How would this work? How would an insurance carrier recover this compensation?

Typically, if an individual works with an experienced personal injury attorney to recover an insurance settlement from an at-fault party or for a personal injury lawsuit, the attorney will receive the payment from the at-fault party in the event that the claim is eventually successful. By this point, the attorney should have received notification from the injury victim’s insurance carrier about their right to subrogation and their desire to recover the monies that they have already spent on the claimant.

Depending on the outcome of the situation and whether or not the claimant has been “made whole” as a result of the settlement, the attorney would send payment to the insurance carrier and the amount they are allowed through subrogation.

In West Virginia, individual injury victims must be “made whole” as a result of their injury settlement or jury verdict before an insurance carrier has a right to recover total compensation. If an individual has not been made completely whole as determined by a court, then the insurance carrier will likely only be able to recover a percentage of how much they have paid for the injury victim’s care.


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