AutoInsurance.com
Published: May 9, 2022Last updated: October 18, 2022

Guide to Auto Subrogation Claims

If a claim is subrogated, what does that mean for your wallet?

Car insurance policies are littered with language you might not use in most normal circumstances. “Subrogation” is one of those words. Essentially, subrogation occurs when your insurance provider has to pay for damages or injuries that someone else caused. In order to recoup the money spent, companies file third-party subrogation claims.

The good news is that insurance companies handle most of this process behind the scenes, with little to no input from the insured (you).

Subrogation Claims

Here is everything you need to know about subrogation claims, a type of third-party claim.

How Long the Process Takes

The length of time it takes to complete an insurance claim depends on the details. For example, a claim with a partial fault or an uninsured driver takes longer than when both parties are insured and one party is completely responsible for the accident.

Partial Fault

If both parties share fault, you will have to take a look at your state’s negligence laws to see how much you can recover. See the table for your state’s negligence laws, which we’ll explain more in detail below.

State Negligence law type
Alabama Contributory
Alaska Pure comparative
Arizona Pure comparative
Arkansas Modified comparative
California Pure comparative
Colorado Modified comparative
Connecticut Modified comparative
Delaware Modified comparative
District of Columbia Contributory
Florida Pure comparative
Georgia Modified comparative
Hawaii Modified comparative
Idaho Modified comparative
Illinois Modified comparative
Indiana Modified comparative
Iowa Modified comparative
Kansas Modified comparative
Kentucky Pure comparative
Louisiana Pure comparative
Maine Modified comparative
Maryland Contributory
Massachusetts Modified comparative
Michigan Modified comparative
Minnesota Modified comparative
Mississippi Pure comparative
Missouri Pure comparative
Montana Modified comparative
Nebraska Modified comparative
Nevada Modified comparative
New Hampshire Modified comparative
New Jersey Modified comparative
New Mexico Pure comparative
New York Pure comparative
North Carolina Contributory
North Dakota Modified comparative
Ohio Modified comparative
Oklahoma Modified comparative
Oregon Modified comparative
Pennsylvania Modified comparative
Rhode Island Pure comparative
South Carolina Modified comparative
South Dakota Slight-gross negligence comparative
Tennessee Modified comparative
Texas Modified comparative
Utah Modified comparative
Vermont Modified comparative
Virginia Contributory
Washington Pure comparative
West Virginia Modified comparative
Wisconsin Modified comparative
Wyoming Modified comparative
  • Comparative negligence: States with comparative negligence allow both drivers to split the costs based on their individual degree of fault. In pure comparative negligence states, a driver involved in an accident can recover money even if they’re more at fault than the other driver. In modified comparative negligence states, recovery is limited by the degree of fault. In some states, a driver must be less than 50 percent at fault to receive compensation.
  • Contributory negligence: In contributory negligence states, if a driver acted negligently in any way, they can’t receive any compensation from insurance carriers.1 In other words, contributory negligence law prevents your insurance company from attempting to recover or seek reimbursement for medical bills, repairs, etc., if the other driver is at fault, even partially.

Uninsured Drivers

If you get into an accident with an uninsured driver, the subrogation claims process will take longer, as your insurance provider has to sue that driver directly rather than their insurance provider. Given that an estimated 12 percent of drivers are uninsured across the U.S.,2 it’s a good idea to have uninsured motorist coverage so you don’t have to subrogate claims.

The Subrogation Process

Fortunately for you, most of the subrogation process occurs behind the scenes at the auto insurance companies, whether you’re filing a claim or receiving one. Just communicate with your provider if you are planning on taking legal action or signing a waiver of subrogation, which we detail below.

CheckFYI

If the accident was your fault or partially your fault, your rates could go up, and even if your claim is settled, you may not receive your entire deductible back if you didn’t receive full compensation.

As for subrogation claims against you, you’ll have to pay them if they’re valid. If you don’t pay, you could face a lawsuit, so it’s best to adhere to the mailed reimbursement request. However, if you hire a lawyer, you can negotiate. Look for a subrogation defense attorney3 on sites like Lawyers.com, Nolo, and Avvo.

If you’re making a claim against someone else, very little action is required on your end. Your insurance company will handle the insurance adjusters and negotiations behind closed doors.

Subrogation 101

Let’s zoom out and learn more about subrogation in general.

What Is an Auto Subrogation?

Auto subrogation is a way that your provider can prevent you from paying for an accident that wasn’t your fault by retrieving money from the at-fault party’s insurance company.

How Subrogation Works

Subrogation occurs when you are not at fault in an accident but had to pay for a deductible, car repairs, or medical costs. Your insurance provider will subrogate a claim with the at-fault party so you can get reimbursed for your costs. If it’s successful, you’ll receive a partial or full reimbursement.

Light BulbNOTE

Collision coverage has a deductible, which you have to pay before your insurance provider contributes. Learn more in our deductible FAQs.

Pros and Cons of Subrogation

Subrogation comes with its positives and negatives. On the positive side, you could get reimbursed for injuries or damages you didn’t cause. Companies that subrogate claims save money and, in theory, pass those savings on to customers, lowering the cost of premiums. Plus, if you subrogate a claim, you can avoid a lawsuit.

On the other hand, a subrogation claim could take a while, especially if the incident involved partial fault or an uninsured motorist. If you’re found to be partially at fault, your rates could increase, and if you receive a judgment, you may owe money to your insurance provider.4

Essentially, subrogation can be a great thing if you aren’t at fault and are filing a claim, but it’s not so great for the at-fault driver receiving the claim, especially if they were driving without insurance.

Subrogation Examples

Here’s an example of when subrogation would occur. Let’s say you’re pulling out of a parking spot and you get rear-ended. You file a third-party claim with the at-fault driver’s insurance provider, but you don’t see any money for a month, and you need to get your car repaired. You pay out of pocket for repairs in the meantime, while your insurance provider files a subrogation claim to reimburse you for the repair costs.

The Purpose of Auto Subrogation

The purpose of auto subrogation is to reimburse you for the costs of repairs, injuries, or the deductible in an accident that wasn’t your fault.

What Is a Waiver of Subrogation?

A waiver of subrogation is an agreement that prevents your insurance company from acting on your behalf to retrieve expenses from an at-fault party. In other words, if you sign a waiver of subrogation, you can’t subrogate a claim and have their insurer pay you directly. Instead, you have reached a settlement with the other party without the involvement of your insurance company. If you sign a waiver, make sure to notify your insurance company.5

If you’re at fault in an accident, try to get the other party to sign a waiver of subrogation. That way, you can settle the claim privately and won’t have to pay a subrogation claim.

Conclusion

For more information on subrogation claims, keep reading to see our auto insurance FAQs. Hopefully, you won’t ever have to deal with subrogation, but if you do, let the insurance companies handle it; it’s their job, and you don’t need the added stress.

FAQs

Subrogation isn’t a topic people know much about, so we’ve answered the questions we’ve gotten the most here.

Do I have to pay for a subrogation claim?

Yes, you have to pay for a valid subrogation claim. If you don’t, you could be sued in a lawsuit, which could cost you even more money in lawyer’s fees.

How long does an insurance company have to subrogate?

How long an insurance company has to subrogate a claim depends on your state’s statute of limitations. See below for your state’s statute of limitations for both personal injury and property damage claims.

State How long after an accident companies can subrogate property damage claims (in years) How long after an accident companies can subrogate personal injury claims (in years)
Alabama 2 2
Alaska 2 2
Arizona 2 2
Arkansas 3 3
California 3 2
Colorado 3 3
Connecticut 2 2
Delaware 2 2
District of Columbia 3 3
Florida 4 4
Georgia 4 2
Hawaii 2 2
Idaho 3 2
Illinois 5 2
Indiana 2 2
Iowa 5 2
Kansas 2 2
Kentucky 2 1
Louisiana 1 1
Maine 6 6
Maryland 3 3
Massachusetts 3 3
Michigan 3 3
Minnesota 6 2
Mississippi 3 3
Missouri 5 5
Montana 2 3
Nebraska 4 4
Nevada 3 2
New Hampshire 3 3
New Jersey 6 6
New Mexico 4 3
New York 3 3
North Carolina 3 3
North Dakota 6 6
Ohio 4 4
Oklahoma 2 2
Oregon 6 2
Pennsylvania 2 2
Rhode Island 10 3
South Carolina 3 3
South Dakota 6 3
Tennessee 3 1
Texas 2 2
Utah 3 4
Vermont 3 3
Virginia 5 2
Washington 3 3
West Virginia 2 2
Wisconsin 6 3
Wyoming 4 4

What is a subrogation claim, and how do I fight it?

A subrogation claim is an insurance claim that you receive if you were at fault in an accident and owe the other party money. Have your insurance company fight it for you. If the claim is deemed valid, you can hire a subrogation defense attorney to negotiate for you.

How do you avoid subrogation?

To avoid subrogation, you can have the other party sign a waiver of subrogation, meaning you settle the claim privately without the involvement of their insurance company.

Citations

  1. Car Accident Defenses: Contributory and Comparative Negligence. NOLO. (2022).
    https://www.nolo.com/legal-encyclopedia/car-accident-defenses-contributory-comparative-30148.html

  2. Uninsured Motorists, 2021 Edition. NOLO. (2021, Mar).
    https://www.insurance-research.org/research-publications/uninsured-motorists-2021-edition

  3. Insurance Subrogation Claims Against You. Miller & Zois. (2022).
    https://www.millerandzois.com/subrogation-claim-accident.html

  4. What Is Subrogation?. Knowles Law Firm. (2020, Mar).
    https://www.knowleslawfirm.com/what-is-subrogation/

  5. Subrogation: What Is It And Why Is It Important? Allstate. (2020, Jul).
    https://www.allstate.com/tr/car-insurance/subrogation.aspx