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You Got a “Subrogation Notice.” Do You Need a Lawyer?

So, you got a letter or notice in the mail. It mentions “subrogation,” and you are left scratching your head, wondering what’s this all about? Am I in trouble? Do I need a lawyer? 

Maybe. But it would help if you understood subrogation and considered how it applies in your particular circumstances. 

First, let’s look at the word itself. It is defined as follows: 

Subrogation (səb-rə-gay-shən) n. (15c) 1. The substitution of one party for another whose debt the party pays, entitling the paying party to rights, remedies, or securities that would otherwise belong to the debtor…. Subrogation most commonly arises in relation to insurance policies. 2. The equitable remedy by which such a substitution takes place. 3. The principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy. 

SUBROGATION, Black’s Law Dictionary (11th ed. 2019).

This definition is too technical for most people, but the idea is this: If someone else, usually an insurance company, has paid a debt that you owe, that company usually has a right to get back what it paid on your behalf if someone else is legally obligated to compensate you. 

Still confused? I don’t blame you. Let me use a couple of examples to explain. 

Suppose you were in an auto accident and you were injured. Your health insurance company has paid your medical bills. The health insurer may be writing to you in order to find out about the circumstances of your accident. 

Why does it care? Because, if the other driver is legally responsible for your injuries, your health insurer has a legal right to collect what it paid for you from that driver (or the driver’s liability insurance company). 

How are you involved? First, the insurance company needs to understand the facts to evaluate the claim. Second, if it has a claim, that claim arises from your legal right to recover your damages from that other driver. So the health insurer may be trying to find out whether you intend to pursue your claim yourself. If you do, your health insurer will likely wait for you to do that and then demand that you pay back what it paid on your behalf, less a share of your costs of recovery. 

If you don’t plan to take steps to recover your damages from the other driver, your health insurer may choose to sue in your name! 

Should you talk to a lawyer about such a notice? Probably. If your health insurer thinks you have a right to recover your damages, maybe you should pursue them on your own. You may have broader damages – such as for pain and suffering — than your health insurer would. You might want to think about pursuing the claim yourself. 

There are other, similar situations where an insurance company might have a right to pursue a claim based on what it has paid for your benefit, such as for damage to your car. It works the same way. 

If you were injured, you can probably find a lawyer who will meet with you to discuss the situation without charging you a fee. Most personal injury lawyers don’t charge for initial consultations. 

Another common situation in which you might hear the term “subrogation,” is if the shoe is on the other foot. That is to say, if it is alleged that you caused damage. The other party’s insurance company may be threatening to sue you to recover for benefits because of that damage. Or it may actually be suing you for such damages. 

In that situation, if you have liability insurance, you should notify your insurance carrier right away. If you don’t have insurance, you’ll almost certainly have to hire a lawyer, unless you are prepared to pay the claim. If you get sued and a judgment is awarded against you, it will harm your credit rating, your wages may be garnished, and in some states, your driver’s license may be suspended until you pay the judgement off.

Of course, there are other situations where subrogation comes into play. But hopefully, thanks to Rich Cassidy Law, you now understand the basics. 

Divorce During COVID-19: What to Know

The COVID-19 Pandemic is clearly unprecedented in the course of human history, impacting daily life like no event ever before. If you are divorced or contemplating a divorce, here are some important things to know about how COVID-19 will affect your life:

1. Courts Are Open – While many non-essential businesses are closed, courts technically remain open. Even a pandemic does not prevent the public’s right to access the justice system. It is supremely important to parties of divorce and custody cases for courts to continue to function because of the ever-evolving nature of family law disputes. Many divorce courts are using tele-video conference (e.g., Zoom, Google Meet, or Microsoft Teams) to conduct status conferences, hearings on contested motions, and even trials. There is no reason to wait until the pandemic is over or for the country to “reopen”; the courts are functioning.
2. Child Support Modification – Most child support laws allow a modification if there is a substantial change in circumstances, which can include the significant increase or decrease in income by one of the parents. The Coronavirus Pandemic has caused an economic calamity, with unemployment at historic levels. Once the Paycheck Protection Program runs out, and people stop receiving full unemployment benefits, income levels will drop. If you lost your job, or your business has experienced a downturn, this would be a substantial change in circumstances that you can use as a basis for modifying your child support obligation. You have to act fast, however, as a child support obligation is extremely difficult if not impossible to get out of without paying, and you can be subject to interest and penalties.
3. Spousal Support Abatement – Much like child support, spousal support (known as “alimony” or “maintenance”) can also be modifiable depending on the circumstances. The economic downturn of the COVD-19 pandemic is cause to seek a modification of support, or even an abatement. An “abatement” is a legal term meaning to stay or pause the support obligation. If you are paying spousal support, you may be able to abate your payments until you recover economically.
4. Parenting Time – The pandemic is not a reason to interfere with the other parent’s visitation time with their child. Despite being a health disaster, many family law Courts have issued orders and guidelines stating that parenting time and visitation must continue as agreed or ordered in the era of social distancing. Many parents are expressing serious concern that the other parent is not adhering to social distancing guidelines. While a judge might ultimately agree that a parent is not doing enough to protect themselves, it should be brought to the court’s attention instead of simply refusing to exchange the children.