The Subrogation Process in Florida

Subrogation rights are integral to the insurance claims process and can significantly impact the amount of recovery you're entitled to after a loss. At its core, subrogation is the right of an insurer to seek reimbursement from a third party responsible for causing damage or a loss. 

If an individual’s car is damaged in an accident caused by another driver, their insurance company may pay for the repairs. If the other driver is found to be at fault, the insurance company may exercise its subrogation rights to recover the costs of the payout.

As an experienced subrogation attorney at The Law Office of Stephen Barker in Boca Raton, Florida, I understand that the subrogation process can sometimes be challenging, especially when you're unsure of all the steps involved. To make the process clearer, here's what you need to know about subrogation in Florida.

The Law Principles of Subrogation in Florida

In Florida, subrogation is governed by both statutory and common law principles. Florida's legal system provides a clear set of guidelines to make sure that subrogation claims are processed fairly, efficiently, and in accordance with both parties' rights.

Statutory Provisions

Florida's insurance laws, particularly under Chapter 627 of the Florida Statutes, provide guidelines regarding subrogation. This chapter establishes the baseline for how insurance companies are to handle subrogation claims in cases of personal injury, property damage, and automobile accidents.

Section 627.739 of the Florida Statutes is one of the key provisions relating to subrogation in automobile insurance. This section establishes that insurance companies have the right to pursue subrogation in cases of bodily injury or property damage caused by the negligence of another driver.

Additionally, Florida’s Uninsured Motorist (UM) coverage laws permit an insurer to be subrogated for any amounts paid out under UM coverage if the insured is involved in an accident with an uninsured driver. 

However, subrogation in such cases may be subject to specific procedural requirements, and insurers aren't allowed to pursue subrogation against their own insured unless specific exceptions apply. If you're unsure whether it's an option for you, consider reaching out to a subrogation attorney.

Common Law Principles

In addition to statutory regulations, Florida courts have shaped subrogation law through case law, which outlines the general rules for how subrogation rights are exercised. Florida courts have consistently held that an insurer’s right to subrogation arises once they pay a claim. 

However, insurers must be cautious not to violate the rights of the insured, particularly when the insured may be entitled to recover damages from the third party.

Under Florida common law, subrogation applies only when the third party is found to be responsible for the loss and when the insurer has paid the claim. It's also essential to note that insurers can't subrogate against their own insured. Next, I'll discuss the specific steps that you can expect throughout the process.

The Steps Involved in the Florida Subrogation Process

The subrogation process involves several distinct steps, and it's crucial for both insurance companies and policyholders to know their roles and responsibilities, beginning with claim notification.

1. Notification of Claim

The subrogation process typically begins when the policyholder files a claim with their insurance company. The insurer will evaluate the claim and determine whether it qualifies for subrogation. 

For example, if a person is involved in a car accident caused by another driver, the insurer will look into the details of the incident, including police reports, eyewitness statements, and other evidence, to determine whether a third party was responsible.

If the insurer finds that the claim is legitimate and falls within the coverage, the insurer will proceed to pay the insured party.

2. Payment of the Claim

The insurer is now considered to have paid the loss and may assert their right to subrogation. If the policyholder’s claim is for property damage, bodily injury, or automobile repairs, the insurance company will typically cover the cost of the damage or medical expenses according to the terms of the policy. Once the insurer has paid the claim, they will initiate an investigation into whether a third party is liable for the loss.

3. Investigation of the Third Party’s Liability

In cases of car accidents, this step involves gathering evidence to determine fault, such as police reports, witness testimony, and traffic camera footage. The insurance company will attempt to establish that the third party is at fault or partially at fault for the incident. 

The insurer may also try to identify other potential parties responsible for the loss. If the insurance company identifies a third party that's responsible for the damage or injury, they'll begin the process of recovery.

4. Pursuit of Recovery

In Florida, this typically involves sending a demand letter to the responsible party or their insurance company, requesting reimbursement for the costs the insurer has already paid to the insured.

If the responsible party has insurance, the subrogating insurer may negotiate directly with the third party’s insurance company to recover the amount paid. If the responsible party is uninsured or underinsured, the insurance company may pursue legal action to recover the loss.

Once the demand for payment has been made, the third party may choose to settle the claim, pay the amount requested, or dispute the liability.

5. Settlement or Lawsuit

If a settlement is reached, the insurance company will recover its costs and release any further claims against the responsible party. If the third party disputes liability or refuses to settle, the insurance company may file a lawsuit with a subrogation attorney to pursue a judgment for the amount they paid to the insured.

Florida’s courts have specific rules and procedures for subrogation actions, and the case may proceed to trial if no settlement is reached. After the insurance company successfully recovers the amount it paid to the insured, the funds will typically be distributed. 

6. Distribution of Recovered Funds

In some cases, the insurer may be required to pay a portion of the recovered amount back to the insured, especially if the insured has received compensation for the same loss from another source (e.g., a settlement from the responsible party).

The subrogation process is designed to prevent the insured from receiving more than they're entitled to, making sure that the policyholder doesn't receive a "double recovery" for the same damages. However, there may be several challenges faced by both insurers and policyholders during the subrogation process.

Common Challenges in the Subrogation Process in Florida

Challenges can complicate the recovery process, create delays, and impact the overall outcome of a subrogation claim. It's important to understand these challenges and the strategies used to address them.

• Disputes over liability: In many cases, there may be conflicting evidence, differing accounts of the incident, or ambiguity about fault, which can lead to disputes between the insurance company and the responsible party or their insurer.

• Uninsured and underinsured third parties: If the person or entity responsible for the loss doesn't have insurance or has insufficient coverage to cover the damage, the subrogating insurer may face difficulties in recovering the funds paid out to the insured.

• Intricacies in the recovery process: Negotiations between insurers or with the third party’s insurance company can take months, and in some cases, insurers may find themselves embroiled in litigation, which can delay the recovery process.

• Risk of the insured's settlement with the third party: The insured may settle directly with the third party without the involvement of their insurer. This can create significant challenges for the insurance company, as the insurer may be excluded from the settlement negotiations or may lose its rights.

While you can't always prevent these types of challenges from happening, you can choose to work with an experienced subrogation attorney who's committed to fighting for your rights and making sure both insurers and policyholders are treated fairly. That's where I, Attorney Stephen Barker, come in.

Contact a Subrogation Attorney Today

If you need a subrogation attorney to help with your case, my law firm, The Law Office of Stephen Barker, is ready to help. I serve clients throughout Boca Raton, Fort Lauderdale, Delray Beach, Boynton Beach, Deerfield Beach, Miami, and West Palm Beach. Contact me today at The Law Office of Stephen Barker to schedule a consultation.