Insurance company

Subrogation 101: How an insurance company can sue a bike manufacturer

By Jim Moss

Editor’s Note: Jim Moss is a Colorado-based attorney who represents bicycle and accessory manufacturers.

Generally, to file a lawsuit, you must have been harmed by the person you are suing. If it’s a product that hurt you, you sue the manufacturer of the product. If it was an individual, you sue the person. If it’s a bad repair, you sue the person who didn’t repair the product. A person is suing another person.

However, in State Farm suing Rad Power Bikes for damages after its insured’s e-bike caught fire, State Farm is not the injured party; was his client. Still, State Farm, which was not injured by the bicycle and as a corporation could not be injured by a bicycle, is suing.

Subrogation

The general view is that plaintiff lawsuits are invading court systems. That whenever someone is injured, a person will sue for some reason in order to recover money. However, this is not the case. Plaintiff lawsuits are of two types, and you may never have heard of the second type: subrogation claims and litigation.

In every insurance policy purchased in the United States, there is the subrogation clause, giving your insurance company the right to sue whoever caused the injuries that created payment on your behalf by the insurance company. . The clause states that the insurance company can sue on your behalf, using your name to recover any money that may be legally owed by the person who caused your damage. So, you may be sitting in a hospital bed with no thought of suing for your injuries when a lawsuit is filed on your behalf against the person who allegedly caused the injury.

In every insurance policy purchased in the United States, there is the subrogation clause, giving your insurance company the right to sue whoever caused the injuries that created payment on your behalf by the insurance company. .

It could be from your car insurance policy if you were injured in a car accident that you weren’t at fault, or from your health insurance policy that pays your medical bills if you tripped in someone’s house. a. A large group that makes extensive use of subrogation is that of workers’ compensation insurers. If you were injured on the job, workers’ compensation pays for your medical expenses, no matter how you were injured or who was at fault, as long as you were working. However, the delivery truck that backed up on you at work, causing your injuries, can be sued to recover lost wages and medical bills that your workers’ compensation pays to get you back on track.

You may be contacted about the complaint and, in some cases, asked if you want to participate by adding additional complaints. In other words, if it is an auto accident subrogation, you and the law firm representing your insurance company can add your deductible claim to the lawsuit. However, claims not covered by your insurance company cannot be added. So if you want to receive damages for pain and suffering, you will need to find your own attorney to represent you in the original lawsuit to recover those types of damages.

An easy clue if you are being sued for a subrogation claim may be that there are two attorneys representing the injured party suing. However, many times an attorney will take the lead and be the face of the lawsuit for both the injured insured and the insurance company.

How big is this industry and how many lawsuits are filed like this?

Millions.

The third largest law firm in Colorado only does subrogation. Most law firms tackle dozens of different areas of law; subrogation companies generally have only one objective: to recover money from their customers and from the insurance companies.

How big is this industry and how many lawsuits are filed like this? Millions.

So what if you don’t want to sue your cousin for supporting you and sending you to the hospital? You are not required to authorize subrogation, but if you do not, you must return all money paid on your behalf and pay your medical bills yourself. There are dozens of situations like this, when two friends sue each other or the lawsuit just seems wrong.

It probably is; however, neither party can do anything as this is a subrogation claim pushed by an insurance company.

Remember the story of the aunt who sued her nephew for a hug that knocked them down, breaking his wrist? At the time, it seemed mean to chase his nephew for a hug. After the trial, it emerged that the aunt was not suing, but her health insurance company was suing the nephew’s landlord’s insurance company to recover medical bills paid by the aunt’s insurance company. It’s a request for subrogation. The lawsuit was titled aunt versus nephew, but in reality it was insurance company versus insurance company.

In most states, subrogation clauses expressly state that the insurance company has the right to sue on your behalf using your name. In a few states, like this State Farm case in Pennsylvania or in specific situations, the law allows or requires the insurance company to sue on its behalf.

Subrogation may seem like a bad clause because of the crazy lawsuits it can sometimes produce. In fact, it can lower your insurance premiums if, at the end of the year, your insurance company’s total payouts are reduced by the money the insurance company received in subrogation.

The other argument is that the money moves from one insurance company pocket to another, and the only beneficiaries are the attorneys suing to create or defend the transfer. Either way, it’s a constant throughout our lives these days and isn’t going away.

When you look at ongoing personal injury litigation in the United States – remember that a large portion of it, by some estimates, could be 40% subrogation claims – an insurance company in pursues another using your name.