Personal injury cases take time to resolve, so health insurance is often needed to obtain immediate medical treatment for injuries caused by somebody else’s negligence. In such cases, California law allows health insurance companies to collect back what they’ve paid out from the responsible party (subrogation) and requires claimants to cooperate with these efforts. When you hire an experienced personal injury attorney, they’ll make sure that the subrogation on your case is handled so that you collect as much money as possible from your settlement or award.
California Code 3040 and Health Insurance
The money that’s owed to your health insurance company must be taken into consideration before settling your personal injury case. In most cases, your health insurance company is limited to collecting what they actually paid out for accident related care or one-third of the total settlement – whichever is the lesser amount (Common Fund Doctrine). It’s important to make sure that the money that’s owed to the health insurance company is accounted for in the breakdown of your settlement before you agree to sign a release.
The Made Whole Doctrine
The made whole doctrine can be helpful for cases where there is very limited insurance coverage for a loss. For example, lets say your health insurer paid out $50,000 for your medical care, but there is only $15,000 in coverage. In such cases the made whole doctrine may preclude the health insurance company from collecting back what they paid out, paying out $10,000 to you and $5,000 to your attorney. It’s important to know that some health insurance companies have language in their contracts that can override the made whole doctrine by giving the insurance company all rights of recovery to the extent of its payment.