What is a subrogation claim?
A subrogation claim arises when an insurer pays an insured for the damages he or she suffered, and in return, advances a claim against the person who caused those damages. Subrogation claims are often written into contracts of private insurance. They can also be set out in a statute. Finally, some subrogation claims arise automatically when an insurer pays out benefits to an insured.
Contractual Subrogation Rights
If you have private insurance that compensates you for lost income or medical expenses, the policy probably also includes terms regarding subrogation. The most common term is one that requires you to pay back any benefits received once you settle or litigate your ICBC tort claim. In most cases, you are expected to repay those benefits up to the limit of your recovery from ICBC.
Some insurers will expect you to sign a repayment agreement before paying you benefits. You should consult a lawyer before signing such an agreement. Generally, if you have an insurance plan that entitles you to benefits, the insurer cannot impose further conditions before paying you those benefits. If you do sign the agreement, you should ensure that it does not impose any new obligations on you.
Statutory Subrogation Rights
Some benefits you receive are subject to statutory subrogation rights. EI benefits, ICBC no fault benefits, and WCB benefits are all covered by statutory subrogation rights. This means that you are required to repay even if you did not sign anything prior to receiving the benefits.
Deducting Legal Fees
Some contractual subrogation clauses allow for deduction of legal fees. If your insurer asserts a subrogated claim, it is important to check if you are entitled to deduct legal fees from that amount.
Negotiating Subrogated Rights
While most contractual or statutory subrogation provisions claim a right to full repayment, an experience ICBC lawyer can negotiate with the insurer or plan administrator to accept a lesser amount.
Claiming from ICBC
ICBC will often refuse to pay wage loss if you have received private wage loss benefits. However, they are generally required to pay under the ‘private insurance’ rule. This rule is triggered in many cases, including where the private insurer asserts a subrogated claim. The same rule applies to medical expenses where the insurer pays those expenses subject to a subrogated claim.