If you’ve been involved in a personal injury case in Wisconsin, you may have heard the term “subrogation” come up during discussions with your attorney or insurance company. Subrogation is a crucial yet often misunderstood concept that can impact your financial recovery after an accident. This blog post will break down what subrogation means, how it works in Wisconsin personal injury cases, and what you need to know to protect your rights.
What is Subrogation?
Subrogation is the legal process through which an insurance company seeks reimbursement for the money it has paid on behalf of an insured party. When you are injured in an accident, your health insurance, auto insurance, or other applicable coverage may pay for your medical expenses or lost wages. However, if another party is responsible for your injuries, the insurer has the right to recover these costs from the at-fault party or their insurance provider.
How Subrogation Works in Wisconsin
In Wisconsin, subrogation claims follow a structured process that is governed by both statutory and case law. Here’s how it generally works:
- Initial Payment of Medical Bills/Lost Wages: After an accident, your health, auto, or disability insurance may cover medical expenses or lost wages related to your injuries.
- Pursuing Compensation from the At-Fault Party: If another party caused your injury, you or your attorney may file a personal injury claim against them to recover damages, including medical costs, lost wages, and pain and suffering.
- Subrogation Claim by the Insurer: If you receive a settlement or jury award, your insurance provider may assert a subrogation claim to recover the expenses they initially covered.
- Negotiation and Reduction of Subrogation Liens: Your attorney may be able to negotiate a reduction of the subrogation claim, ensuring that you retain a larger portion of your settlement.
Wisconsin’s “Made Whole” Doctrine
One of the most critical aspects of subrogation in Wisconsin is the “Made Whole Doctrine.” Under this legal principle, an insurer cannot recover subrogation funds unless the injured party has been fully compensated (or “made whole”) for their damages. This means that if your total damages exceed the settlement amount, your insurer may not be entitled to reimbursement.
Wisconsin’s “Common Fund” Doctrine
Another important subrogation principle is the common fund doctrine. This principle essentially requires subrogated parties to pay their fair share of the attorney’s fees and costs an injured person incurred to obtain a settlement/verdict from the at-fault party. The common fund doctrine requires the subrogated entity to reduce its subrogated lien to reflect a fair share of the injured person’s attorney fees and costs in collecting the settlement/verdict.
ERISA and Federal Preemption
While Wisconsin law protects injured individuals under the Made Whole Doctrine, it is important to note that some insurance plans, particularly those governed by the Employee Retirement Income Security Act (ERISA), may not be subject to state law. ERISA plans often have stronger subrogation rights and may override Wisconsin’s made-whole protections. A qualified personal injury attorney can help navigate these often murky waters.
Conclusion
Subrogation claims can significantly impact your financial recovery in a Wisconsin personal injury case. Understanding your rights and working with an experienced attorney can help ensure that you are not unfairly burdened by reimbursement demands. If you are navigating a personal injury claim and facing subrogation issues, seeking legal guidance is essential to maximize your compensation and protect your rights. For a free, no-obligation personal injury consultation with one of our highly qualified personal injury attorneys, contact Doar, Drill & Skow today.