What You Need To Know About Subrogation Claims in New York
Subrogation is important for all insured drivers to understand. Here’s everything you need to know about filing subrogation claims in New York.
Subrogation allows insurance companies to collect payments from an at-fault third party. If a driver’s car gets damaged because of an accident caused by another driver, their insurance company can use subrogation to receive compensation from the at-fault party.
Why do Subrogation Claims Exist?
Subrogation claims ensure that those who are not at fault for an accident do not have to pay for damages they didn’t cause. After an accident, insurance companies will file a claim to the at-fault drivers’ insurance, or the third party carrier, to pay for damages and medical bills.
Those who carry car insurance can think of subrogation as a refund process, where the not-at-fault driver and their insurance get damages, medical bills, and car repairs “refunded” by the at-fault driver’s insurance.
No-Fault Insurance in New York
New York is a no-fault insurance state, which means that drivers are typically reimbursed by their own insurance company post-accident. The subrogation process thus mainly impacts insurance companies because drivers have already received damage “refunds” from their insurance.
In New York, after they reimburse their driver, insurance companies may begin subrogation against the at-fault driver’s insurance to recover their losses. In other words, subrogation is typically an insurance-versus-insurance matter where the insurance companies are the ones that have a stake in the outcome.
When Subrogation is Used in New York
Subrogation is enacted in almost every single car accident. However, one driver must be at fault for damages for the not-at-fault driver’s insurance company to receive payments from the at-fault driver’s insurance. Some examples of clear at-fault accidents are:
- Rear endings
- Hitting a parked car
- Accidents caused by speeding of a party
- Accidents caused by road rage of a party
- Intersection accidents
Related: New York Auto Accident Attorneys
Process for Filing Subrogation Claims in New York
Drivers typically do not need to take any steps during the subrogation process. The insurance companies will typically handle the entire agreement, so the drivers don’t need to play an active role. However, drivers who are concerned about receiving enough damages from subrogation should consider staying in close contact with their insurance representatives.
All drivers need to do during subrogation is to report the accident to their insurer and let them know if they want to take legal action. While drivers in New York are limited in their legal pursuit options because of the no-fault law, they can still go to court for serious injuries suffered because of the accident.
Waivers of Subrogation
Waivers of subrogation are agreements between a driver and their insurance company that prevents the insurance from acting on the driver’s behalf during the subrogation process. This means that it is the responsibility of the driver, not the insurance company, to handle refunding expenses after an accident.
It is not typically recommended for drivers to get a waiver of subrogation with their insurance company. This is because most drivers are inexperienced in the insurance processes and may receive less than they are entitled to. Furthermore, if anything goes wrong during the negotiating process, insurance companies cannot step in to help if the driver has a waiver of subrogation. Drivers should always read and understand the waiver in its entirety before signing.
Because New York is a no-fault insurance state, most drivers will not need to worry about waivers of subrogation. The subrogation process does not directly impact them or the refund they receive for any auto damages or medical bills, so they will not have to deal with any negotiations.
FAQs About Subrogation in New York
If one insurance company cannot get subrogation payments from the other, are the drivers impacted?
No; because New York is a no-fault insurance state, drivers will receive damage payments from their own insurance companies regardless of fault. In other words, drivers do not need to wait for the subrogation process to be successful to receive payments for damages.
What if the fault is unclear in a subrogation case?
Even if the general fault is unclear in a car accident, insurance companies can still work out subrogation payments by determining which party is at fault for specific damages.
How long does the subrogation process usually take?
The length of the subrogation process depends on the specific case. For example, if one driver is completely at fault for an accident, the process will be fairly quick. But, if both parties are somewhat at fault, the process will take longer because insurance companies will have to sort out and negotiate payments to each other.
What if an uninsured driver causes an accident?
If an uninsured driver causes a car accident, the not-at-fault driver will still be able to receive payments from their own insurance company because New York is a no-fault insurance state. However, the insurance company may have difficulty with the subrogation process afterward because they will likely have to sue the driver directly.