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What is a subrogation action?

A subrogation action can be alarming for an injured person, because it involves insurance companies looking to be paid for their coverage of your injuries, such as long term disability benefits or medical expenses. If you don’t know your rights regarding subrogation actions, you can be made to pay an unfair amount to your insurance company, and won’t have reasonable compensation for your injuries.

The first step to understanding subrogation actions is defining what subrogation actually means.

What is subrogation?

Subrogation is defined as the substitution of one person or group by another in respect of a debt or insurance claim. In other words, subrogation is whenever someone steps in to pay a debt on your behalf.

Subrogation is the main selling point of any insurance company. Auto insurance dealers promise to help you financially when you get in a car accident by paying your vehicle repair costs. Medical insurance promises the same thing if you are drastically injured.

However, a subrogation action is different than standalone subrogation.

What is a subrogation action?

A subrogation action is taken by your insurance company when you sue the person at fault for your injuries.

For example: you’re involved in a motor vehicle accident and go on long term disability because of your injuries. Your insurance company acts on your behalf and pays for your LTD. If you then seek legal action against the person at fault for your injuries, your LTD insurer will pursue subrogation action so that they can be reimbursed for their expenses out of your settlement funds. Since your insurance company acted on your behalf and financed your recovery, they are able to seek compensation.

This is where the issues of subrogation actions come into play – how much of your settlement is your insurance company owed? The answer is different based on each individual case.

The specific contract you have with your insurance company will determine their level of involvement in your settlement, as will the severity of the accident and the funds that your insurance company has afforded you. The challenge is that subrogation actions can be highly complicated, and result in unfair compensation for the injured party if not handled with a degree of expertise.

Our team is experienced in a variety of insurance law claims, and has worked closely with the victims of negligent injury cases to ensure that they’re rightly compensated. If you’re thinking about pursuing legal action against a negligent party in a car accident or other injury at the fault of another, don’t hesitate to contact us here or call 1-888-434-0398 for a free consultation.


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MacGillivray Law is a personal injury law firm with offices in Nova Scotia, New Brunswick, and Newfoundland and Labrador. We serve clients all across Canada.

If you cannot travel to one of our offices, we will accommodate your circumstances and travel needs. We can provide a consultation by phone, Zoom, or FaceTime, or travel to meet you in your home when required.

If you would like to learn your legal options at no obligation, contact us today to set up a free consultation.

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