Connecticut Subrogation Laws

During your personal injury case in Connecticut, you may encounter the term, “subrogation.” While this insurance process is relatively common, it can be complicated and difficult to understand as a policyholder – especially while you are also dealing with serious physical injuries and bills. Insurance subrogation does not require much involvement from you as the policyholder, but it could impact your settlement, as it gives your insurer the right to seek reimbursement from the defendant of what it spent on your medical bills.

What Is Subrogation?

Subrogation is a legal term that means to step into the shoes of another party, typically in terms of insurance coverage. It describes the right that an insurance carrier has to recover the amount that it spent on a policyholder’s losses from the insurer of the at-fault party. It will generally do this by filing a subrogation claim, which the third party will have to pay before giving the rest of a settlement or judgment award to the injured victim.

For example, if you get into a car accident in Milford and need immediate compensation to pay for emergency medical care, you may file a claim with your health insurance company for this coverage. If an investigation later finds that the other driver is at fault for the car accident, your health insurance company would have the right to file a subrogation claim against the other driver’s insurer to recover what it spent on your care.

Connecticut’s Tort/Fault Law

In a Connecticut car accident case, an injured victim will file an insurance claim with the provider of the at-fault party. This is because Connecticut is a tort-based or fault state, where the person or party guilty of causing a car accident must pay for damages through his or her automobile insurance policy. As a crash survivor, you have two different options for recovering financial compensation for your injuries and losses. One involves subrogation.

The first option is contacting your own car insurance provider, even if you did not cause the crash, and filing a first-party claim. This option will lead to your insurance company paying for your immediate bills and losses, then seeking reimbursement through the subrogation process from the at-fault party. The second option is filing a claim directly with the at-fault driver’s insurance company. This option may take more time for the money to get to you.

The Collateral Source Rule

In Connecticut, a law known as the Collateral Source Rule prevents a health insurance company from recovering payments via subrogation or reimbursement if the policy involved is fully insured and not governed by the federal Employee Retirement Income Security Act. In other words, subrogation of a collateral source is prohibited unless a right of subrogation exists. Medical pay subrogation is allowed, however, if the policy has subrogation language, as the Collateral Source Rule allows a policy to contain a subrogation clause for med pay benefits.

This rule also states that a personal injury claim that involves coverage from multiple policies, such as health insurance and car insurance, will be resolved through coordination of these benefits rather than subrogation. A coordination of benefits provision in a health insurance policy can prevent the duplication of benefits when a victim is covered by two or more policies after an accident. It permits the reduction of the benefits included in a plan if that plan does not have to pay benefits first. State law governs which plan of multiple options will provide primary coverage and which will be secondary.

Anti-Subrogation Rule

Connecticut has an Anti-Subrogation Rule that makes someone who contributes to the payments on the premium of a property insurance policy exempt from subrogation. This rule states that if an individual paid the premium of an insurance policy and would not reasonably expect to be the target of subrogation, he or she is exempt from this insurance process. This rule may be used in a case where a house guest causes property damage rather than the owner of the home, for example. Equitable subrogation may still be permissible even when statutory subrogation is not, based on the circumstances.

For more information and assistance with subrogation, contact the attorneys at Connolly Brennan Ralabate, PC.