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Florida Subrogation Law

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Posted on October 21, 2022

Subrogation is a legal procedure that is most common in accidents where an insured person sustains damage to their property from an uninsured party. When an insurance policyholder sustains damage to their insured property, the insurer has an obligation to cover the cost of the damage per the insurance policy.

Subrogation occurs when the insurance company pays the insured, and then turns around and seeks reimbursement from the party that caused the damage to their policyholder. This is a legal procedure that usually happens behind the scenes after an accident.

The concept and reasoning behind subrogation is explained in the DeCespedes v. Prudence case in the District Court of Florida as:

“a wrongdoer who is legally responsible for the harm should not receive the windfall of being absolved from liability because the insured had had the foresight to obtain, and had paid the expense of procuring, insurance for his protection; since the insured has already been paid for his harm, the liability of the third person should now inure for the benefit of the insurer.”

Florida Subrogation Laws

A study directed by the Insurance Research Council (IRC) in 2018 found that over 26% of drivers in Florida are uninsured. Why does this matter? Because when a driver that is uninsured is at fault in an accident with a driver who is insured, the insured driver’s insurance must pay for the cost of the damages sustained by their policyholder. Most insured drivers have uninsured motorist (UM) coverage to protect themselves in instances like this. UM coverage can help with medical bills and other costs associated with the accident.

When an insured driver is in an accident with an uninsured driver, insurance companies are losing money and they may choose to subrogate the claim. In other words, the insurance company may sue the uninsured driver to recover what they had to pay for the accident.

Before subrogating a claim insurance companies must consider:

Who Is Responsible?

They must be sure that no other parties can be found at fault for the accident and damage.

Does the Responsible Party Have Funds to Pay?

Generally, the uninsured party is uninsured because they are lacking funds, if this is the case it may be futile to go after them.

Did You Accept a UM Settlement?

Settlement agreements usually contain clauses that prevent the insurance company from subrogating a claim against the uninsured driver. The insured is obligated to inform their insurance if they are offered a claim. The insurance company can then assess the information and decide if they would like to accept the settlement, or pay out the claim and then pursue a subrogation claim.

Subrogation in Relation to Florida’s “Made Whole” Rule

Sometimes, a policyholder’s loss can be more than what the insurer paid them per their policy. When this occurs, and insurers pursue subrogation, they are required to reimburse the insured’s loss in full before they can retain any excess proceeds from subrogation.

We Can Help You

If you were involved in an accident with an uninsured motorist, call an experienced Tampa car accident attorney from Vanguard Attorneys today. We can help you navigate the process and determine the best course of action. Give us a call today at (813) 471-4444 or contact us online for a free consultation.