Car Wreck Subrogation: Gorillas, Monkeys, and Pumpkin Pie

By Blaine A. Norris

My grandmother made the best pumpkin pie. Don’t ask me what the secret was, because I don’t know it. All I cared about was making sure I got my fair share of the pie at the end of the meal, which as the youngest of three boys, was never a given. Unlike pumpkin pie, car wrecks cause pain, injury, missed work, and devastating losses and I do not make light of that. But as a victim of a car wreck, you may find yourself in my position at Thanksgiving: having to fight to get your fair share of the pie.

Our civil jury system can’t use magic to undo the car wreck happening. All it can do is try to make the innocent injured victim whole through compensation. That requires a candid conversation about money: how much does it take to make a person whole, to pay for her medical bills, lost wages, and general damages for disability, pain and suffering. Imagine adding up these amounts and the total being “a pie.” And just when you can smell the pie, just when it is almost ready to eat, imagine other hands reaching in to grab their fill.

Even though you “made the pie” based on your injuries, hiring a lawyer, filing a lawsuit and going through the lengthy process of litigation, the law might let these other folks grab a piece of the pie. The main folks reaching in are medical providers, Medicare/Medicaid, and health insurance companies. Here, I want to just consider briefly health insurers’ claims for a piece of the settlement pie.

Your insurance contract likely has several paragraphs devoted to “subrogation” and “reimbursement” obligations in the event your recover money from another insurance company from a car wreck. Even if your insurance paid your medical bills that does not mean the fight is “over.” They are running up a “tab” so to speak based on their benefits provided. Let’s say the health insurance pays $75,000; at the end of the case, it will reach in to grab $75,000 of your pie. If the pie is big enough, everyone gets fully compensated. But for most folks, there are too many bills and too little insurance and assets. The pie, sadly, is often not large enough for everyone to get as much as they want.

Just how strong are the other hands reaching for your pie? Are they strong, like a gorilla, and small, and cute like a circus monkey? Multiple factors determine whether we fighting a gorilla or a monkey. If your pie is big enough to make you whole, you will find yourself fighting a gorilla to keep your share of pie. If you have a Self-funded, Self-Insured ERISA based plan that has the right magic language in it, the gorilla may start reaching in to grab the whole pie and the law may let him have it. It ain’t pretty and you might not even get a piece of the pie you made.

Most health insurance companies claim to be gorillas. We use our experience to argue that despite their beating of their chests, they are really just circus monkeys in the red jacket and rope, with music playing, happy to settle for whatever they can get. Given the loss and hardship an individual person goes through in a devastating automobile wreck, trying to make sure the actual injured victim gets her fair share of the pie, well, that’s about the most important job a personal injury attorney has.

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