Fighting to Make Subrogation Fair

Have you seen those commercials for personal injury lawyers? The ones that promise patients big pay outs if they are injured in an accident that was someone else’s fault?

Those ads lead us to believe that those seriously injured in an accident can recoup large sums of money; money that will then cover the costs of future medical bills and costs to make their homes wheelchair accessible. But the truth is that most accident victims don’t receive settlements in the millions—even though their lifetime costs will be in the millions—the settlements are more like the thousands.

That wouldn’t be so bad necessarily if it wasn’t for something called the subrogation industry. When you’re injured in an accident that wasn’t your fault your insurance company likely paid medical bills that should have been paid by the person who caused the accident. It’s not fair for the insurance company to have to cover someone else’s costs, but the problem is that insurance companies turn to subrogation companies to recover their money.

Subrogation companies are like bounty hunters. They’re paid on commission to go after settlements that accident victims receive on behalf of insurance companies. Because there’s no risk to them, they go after settlements of any dollar amount—even those only in the thousands of dollars. These companies use many of the same tactics that collection agencies use to try to intimate and pressure patients into turning over huge portions of their settlements. And they’re successful. The self-proclaimed leader in the field, a Kentucky-based company, boasts on its website that it “actively lobbies agencies and governing bodies at the state and federal levels to improve recovery rights for our clients and the entire industry.”

The problem is that the settlements accident victims receive are the only monies that these patients will ever receive from the person responsible for their injuries. Those, like Jeff, who are paralyzed, will require a lifetime of support. Their injuries leave them and their families financially, emotionally and physically devastated.

We think that the subrogation process should be made fair. That’s why we are supporting legislation and regulation that would prohibit the industry from attempting to recovery money from settlements that amount to less than $1 million and further would place a 25 percent cap on the amount of recoverable from an eligible settlement.

If you agree, we ask you to write an email to your Member of Congress expressing your support for making the subrogation process fair. You can find your Representative here: http://www.house.gov/representatives/find/ and your Senators here: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

Here’s a sample letter you can send:

Dear [Representative/Senator]:

I am writing to ask you to champion legislation and support regulation to make the subrogation process fair.

Subrogation companies are bounty hunters retained by insurance companies to capture portions of settlements that accident victims receive from the person who caused their injuries. Today, these companies can go after settlements of any amount and since there is no risk to them, they often target settlements in the thousands, not millions. These settlements are the only monies that a disabled patient will receive from the person responsible for their injury.

I believe that the subrogation industry should be prohibited from attempting to recovery money from settlements that amount to less than $1 million and further support placing a 25 percent cap on the amount of recoverable from an eligible settlement.

Thank you for your attention to this important matter.

Sincerely,