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In Subrogation for a Car Accident I Already Paid For?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/31/2018

Q: I have a question about subrogation. I was at fault in an accident and was uninsured. There were no injuries, only damaged the bumper of the other vehicle. The owner of the vehicle approached me and asked me to pay 1000$ for his deductible and I did because I felt that was the right thing to do. He drafted a document that we both signed stating I paid him in full. Now State Farm has a subrogation claim against me for 1800$ (total amount of claim), am I responsible for paying the claim again?

A: Unfortunately, you may be.  You should never have signed that paper or have given them the $1,o00. I know you felt that it was the right thing to do, but insurance companies don’t care about personal agreements between parties.  They have legal and company protocol to follow when it comes to what is done for a claim.

When someone files a claim with their insurance company for an accident they did not cause, the insurance company will pay out for the damages minus their client’s deductible. However, when it is time for subrogation the company will include the client’s deductible in the amount they go after the other party for. Any money that gets paid back will go first toward the client’s deductible to get them their money back first.

In your case, the insurance company paid $800 towards the car repairs and then the other party used the $1,000 you gave them to pay the repair shop the deductible amount they were responsible for. They could have also just got an estimate for the cost of repairs, not had the repairs done at all, and pocketed the money. Either way, the insurance company can legally go after you for the full $1,800.

What you need to do is talk to the claims adjuster and explain that you already paid their client back their deductible. You will need to provide a copy of the cashed check and the written agreement to show you have. It’s not a guarantee it will work, but it is a place to start. If the adjuster does not accept this, try and have the other party get the insurance company to drop that $1,000 from the subrogation. If neither work, you may have to take the other party to small claims court.

Even if you do get the $1,000 taken care of, you will still have to pay that remaining $800.  As the at-fault party, you are responsible for the full amount of damages, not just the other party’s deductible; which is why the insurance company has started subrogation against you for the full amount of the repairs.

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Michele Wilmonen

Michele's first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she's earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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