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No, you do not have to pay subrogation if you have car insurance. Subrogation is when an insurance company recovers money that they paid out in a claim when their policyholder was not at fault, and if the drivers involved are insured, the process of subrogation will take place between their insurance companies. If the at-fault driver was uninsured, however, the other driver’s insurance company might attempt to make them pay for the damage out of pocket through the subrogation process.
In other words, the only time you might need to pay as a result of subrogation is when you don’t have enough insurance coverage. And even then, if you choose to not pay a subrogation claim, the insurer will continue to mail requests for reimbursement or might decide to take legal action.
Subrogation Payment Example
Driver A rear ends Driver B. Driver B files a claim with their own collision insurance, pays their deductible, and receives a payout from their own insurance company, Insurer B.
Insurer B doesn’t want to pay for the damage caused by someone else, so they begin the process of subrogation with Driver A’s insurance company to recover the deductible and claim amount.
How the Subrogation Process Works
If you receive a letter of subrogation from another insurer, you should immediately let your own insurance company know. Car insurance companies have lawyers, subrogation adjusters, and other experts who will handle the demand and let you know if they need any information from you.
If you do not have insurance, a letter of subrogation is a sign that you might need to hire a lawyer. In this case, the other driver’s insurer will likely pursue a settlement or even litigation against you. Individual cases vary, so legal representation can help you determine whether you need to pay subrogation.
For more information, check out WalletHub’s guide to subrogation.
People also ask
What is an example of subrogation?
An example of subrogation is when a car insurance company pays out a claim to a policyholder before fault is determined and then attempts to recover their costs from the other driver. Subrogation is the legal process by which insurers receive compensation from an at-fault party. Subrogation also occurs with business/general-liability insurance.
Simple Example of Subrogation in Car Insurance
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read full answerWhat is a waiver of subrogation?
A waiver of subrogation is a legal clause that prevents an insurance company from recovering the money they paid on a claim from the responsible party’s insurer. In car insurance, a waiver of subrogation usually keeps the not-at-fault driver’s insurer from recouping claims payments from an at-fault driver.
Waiver of Subrogation Example
Say Driver B ran a red light and hit you when you were driving legally. You need your car repaired soon,...
read full answerCan you negotiate a subrogation claim?
Yes, you can negotiate a subrogation claim in some circumstances, though it may not be necessary if your insurance company is handling the claim. Subrogation claims are claims filed by insurance companies against an at-fault party to recover any costs paid out for their not-at-fault policyholder’s claim.
How to Negotiate a Subrogation Claim
If you are the policyholder
It may be difficult to negotiate a subrogation claim if you are the not-at-fault...
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