Subrogation

An insurer that paid your bills steps into your shoes to recover from whoever caused the loss.

It is why your own health insurer may end up with a share of a settlement paid by the other driver. This is general information, not legal advice.

What it means

Subrogation and reimbursement are close cousins. In subrogation the insurer pursues the wrongdoer directly, standing in your position. In reimbursement it claims from money you recover. Injury practice uses the words loosely; the effect on you is similar.

California caps what a health plan may take from a recovery, reduces it by your comparative fault share, and applies a pro rata reduction for the cost of obtaining the recovery. Certain lienholders — Medi-Cal, workers' compensation, hospitals under the lien statutes — are expressly outside that cap and run under their own rules.

Whether a plan is governed by state law at all depends on how it is funded, which is a question worth asking before assuming a cap applies.

Where this is dealt with properly

This entry is the short answer. These pages own the subject.

• Health insurance liens and reimbursement
• Medical bills and the explanation of benefits

Common questions

Why does my own insurer get money from my settlement?

Because it paid for treatment made necessary by someone else's conduct, and the law lets it recover that outlay from the person responsible — in practice, out of what they pay you.

Sources: Civ. Code, § 3040 (the cap, the comparative-fault reduction, the common-fund reduction, and the exclusions in subd. (g)); Welf. & Inst. Code, § 14124.72 (the Medi-Cal attorney-fee reduction).