If you’re dealing with the aftermath of your first serious car crash, you’re probably going to hear and read a few terms that are new to you. One of them may be “subrogation.”
Subrogation can help you get a payout from your insurance company even if the other driver was at fault. Your insurer would pay you and then pursue the other driver’s insurer or the driver themselves to collect on the money it paid you.
How California law determines liability
First, it’s important to understand how California law determines fault, negligence and liability in a crash. California is a “pure comparative negligence” state. That means a percentage of fault is assigned to each driver.
Crashes that are 100% one driver’s fault aren’t very common. Even if one driver is primarily at fault, the other one may be assigned some degree of fault, which would lessen their potential payment by whatever percentage that is.
What subrogation can do for you
If the at-fault driver’s insurance company is slow to pay, you may be able to seek compensation from your own insurer. Your insurance company will pay you (minus your deductible) and then go to the other driver’s insurer to get reimbursement. That’s considered subrogation.
You may have to pay your deductible if you need to go this route. However, that’s part of the money your insurer will seek from the other insurance company, which would be considered the third-party carrier (TPC).
Beware of a waiver of subrogation
Sometimes an at-fault driver who doesn’t want another accident on their record will offer to settle directly with the other driver. They don’t want to get their insurance company involved. They might ask you to sign a waiver of subrogation. By doing that, you give up the right to have your insurer take action on your behalf. That’s almost never a good idea. Some insurance companies don’t even allow it.
It’s a lot to think about at a time when you’re trying to heal and get your life back on track. It’s crucial not to settle for less than you need and are entitled to just to get it over with. That’s why it helps to have legal guidance to protect your right to fair compensation.