Subrogation

Equitable Subrogation In Texas

May 1, 2010 | Mark S. Humphreys

A Weatherford man suffers a property damage loss. Or maybe he is from Grand Prairie, Dallas, Arlington, or Fort Worth. His own insurance pays his losses then he makes a claim against the insurance company of the person who caused the loss. How does that work?

The doctrine of equitable subrogation is applied liberally and is broad enough to include every instance in which one person, not acting voluntarily, has paid a debt for which another was primarily liable and which in equity and good conscience should have been discharged by the latter. This was stated in the case, Matagorda County v. Texas Association of Counties Government Risk Management Pool, a 1998, Corpus Christi Court of Appeals case.

The purpose of equitable subrogation is to allow the insurance company to recover the monies it has paid out, only after the insured injured person is fully compensated. The Texas Supreme Court explains how this works in, Ortiz v. Great Southern Fire & Casualty Ins. Co. This is a 1980 case, wherein the Ortiz home and contents were damaged in a fire caused by the negligence of a third party. The home was insured, but the contents were not. The money damages recovered from a settlement with the third party (a carpet cleaner) were less than the amount of damages that Ortiz suffered. The insurance company, Great Southern Fire & Casualty Ins. Co., was only entitiled to subrogate to the extent that the sum of the insurance collected, plus the amount allocated in the settlement agreement to real property damage, exceeded Ortiz real property loss. Because Great Southern could not show at trial what amount, if any, of the settlement agreement was allocated to Ortizs’ real property loss, it was not entitled to seek the amount it paid to Ortiz from Ortiz settlement.

Subrogation In Texas – An Important Thing To Know About

April 29, 2010 | Mark S. Humphreys

What if that Grand Prairie resident, or someone from Fort Worth, Arlington, Dallas, or out in Weatherford gets a bunch of money in an insurance settlement. That’s a good thing, Right? Well maybe not. It depends on whether or not there were any subrogation interests involved and whether or not those subrogation interests were properly handled.

USLEGAL.com defines subrogation as the substitution of one person in the place of another with reference to a lawful claim or right.

Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages.

Subrogation – What Is It?

March 25, 2010 | Mark S. Humphreys

Someone in Grand Prairie has their insurance company pay a benefit for them. Or maybe the person is in Arlington, Dallas, Fort Worth, Mansfield, or out in Weatherford, Texas. When a claim is paid by a person’s own insurance company, and the claim resulted from the fault of another person or company, then the person’s own insurance company has a subrogation right. Well, what does that mean to you?

One web-site defines subrogation as the substitution of one person in the place of another with reference to a lawful claim or right. Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages.

There are three types of subrogation: equitable, contractual, and statutory.

Subrogation In Texas Auto Claims

October 29, 2009 | Mark S. Humphreys

Texas Insurance Code, art. 5.06-1 and the particular policy’s “Right to Recover Payment clause create a statutory and contractual right of subrogation against a third party motorist to recover uninsured and underinsured payments the insurance company makes to its customer. If the insurance company makes a payment to any person under this coverage, the insurance company is entitled to recover up to the amount of the payment from the proceeds of any judgement or settlement with the person. This is spelled out in art.5.06(6).

The result of this rule is that a person who collects uninsured or underinsured benefits from their insurance company as the result of someone else’s negligent actions in a car wreck type of situation, cannot turn around and sue that individual. Or, if you do sue the responsible party and they are successful in collecting money from that individual, then they must pay back the insurance company for the benefits they have paid on the insured persons behalf. This of course is limited to paying the insurance company back only up to the amount they have paid out. Any excess would belong to the injured, insurance company customer. The purpose of this rule is to prevent a double recovery by the injured party.

What happens most of the time in real life is that the injured, not at fault person, makes a claim against the person who caused the injury. The injured person then discovers that the atfault person is either uninsured or underinsured. They then make the uninsured or underinsured claim against their own insurance company. Rarely, or almost never does the injured party pursue a further claim against the atfault party. However, the insurance company that paid the benefits will do an asset check on the atfault party and make a determination as to whether or not it is financially worthwhile to pursue the atfault party.

Subrogation Issues In Texas Insurance Law

October 14, 2009 | Mark S. Humphreys

Whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, or any other metroplex city, or in a smaller town such as Weatherford, Granbury, Cleburne, or Azle here is something that happens just about every day. An accident occurs because of someone elses negligent actions. Someone is injured and gets medical treatment. The medical treatment is paid for by the injured persons’ health insurance, such as Blue Cross Blue Shield, Humana, Prudential, or any number of other health insurance companies. Maybe the medical care is paid for by the injured persons’ own auto insurance company through the personal injury protection (PIP) benefits or med-pay benefits. Most property insurance like homeowners policys and commercial policys have some sort of med-pay that pays for injuries.

In most these cases, someone else, or someone else’s insurance company is ultimately responsible for the injury that was incurred. The medical benefit that was used to pay bills is seldom going to pay all the bills. The injured person still has co-pays and deductibles to meet and sometimes there are caps on what is paid. Also, these medical benefits do not pay lost wages or anything for pain and suffering or anything for impairment or disfigurement or scarring that may have resulted from the injury. As a result of these other losses, even the person who does not want to “sue” anybody has to make a claim against the responsible people and their insurance company to recover all their losses.

When the injured persons’ insurance pays for a loss that was ultimately the resposibility of the other person or the other persons’ insurance, the injured persons’ insurance has a subrogation right to the monies received from others. In other words, the injured persons’ insurance has to be paid back and there is no legal, double recovery.