This guide details aspects of Texas subrogation claims, how to handle them, and steps to take when you receive a subrogation notice. Understanding subrogation and working with your attorney can protect your financial interests and manage the challenges involved in subrogation.

What Is a Subrogation Claim in Property Damage?

Subrogation is a legal process where an insurance company, after compensating its policyholder for a loss, assumes the policyholder’s right to pursue the responsible third party for reimbursement. Essentially, once the insurer pays a claim, it assumes the rights of the insured to recover the amount paid from the at fault party or their insurance. Subrogation ensures the subrogated defendant, or party responsible for the damage bears the financial responsibility. If you are found at fault for the damage, or if responsibility is uncertain, the insurance company may seek reimbursement from you for the amount they paid out. When an insurer files a subrogation insurance claim to recover these costs, the process can create significant financial liability for you.

Can You Fight a Subrogation Claim?

Fighting a subrogation claim can be complex, but can be done. To contest the claim, you’ll need evidence proving you were not at fault or that the amount being sought is unreasonable. Respond promptly, verify the claim details, and work with your insurance provider to navigate the process. If the claim is large or complicated, consulting an attorney is advisable because they can dispute or negotiate the claim to minimize your financial liability. Proper legal expertise is important in understanding subrogation technicalities and protecting your rights.

Steps to Take When You Receive a Subrogation Notice

When you receive a subrogation notice, act quickly by doing these to protect your interests:

• Review the Notice: Understand the claim details and verify the facts.

• Contact Your Insurer: Discuss the subrogation claim with your insurance company.

• Gather Evidence: Collect supporting documents to dispute or negotiate the claim.

• Consult a Lawyer: Seek legal advice if the claim is significant or if you dispute fault.
• Respond Promptly: Avoid delays to prevent legal consequences.

Common Reasons to Dispute a Subrogation Claim

There are valid reasons to dispute a subrogation claim, which include:

• Disputed Fault: You believe you were not responsible for the accident.
• Inaccurate Claim Amount: The claim amount is inflated or incorrect.
• Exceeding Policy Limits: The claim exceeds policy coverage or legal limits.
• Lack of Documentation: Insufficient evidence from the insurance company.
• Third-Party Liability: Another party shares or holds full responsibility.

How to Fight a Subrogation Claim for Property Damage

To effectively fight a property damage subrogation claim, follow these steps:

• Review the Claim: Thoroughly examine the subrogation notice and the insurance company’s demand. Check for accuracy regarding the incident, damages, and amount sought.

• Dispute Fault: If you believe you were not at fault or share only partial liability, gather evidence like police reports, photos, or witness statements to support your case.

• Examine the Claim Amount: Verify the amount is accurate and reflects the true cost of damages. If inflated or excessive, challenge the amount with documented evidence.

• Consult an Attorney: If the claim is significant, hire an attorney experienced in subrogation claims to negotiate on your behalf or dispute the insurer’s demands.

• Negotiate or Settle: Negotiate with the insurance company to reduce the amount owed or reach a favorable settlement.

• File a Counterclaim: If a third party was responsible or shared liability, you may be able to file a counterclaim or seek compensation from them.

What Happens if You Lose a Subrogation Claim?

If you lose a subrogation claim, you’ll be legally responsible for reimbursing the insurance company or the party that filed the claim. This could include the total amount they paid for the damages, which can be substantial. Failure to pay the required amount can lead to further legal consequences, like a lawsuit, wage garnishment, or a lien placed on your property. Your credit score could be affected if the unpaid claim is reported to credit agencies. To avoid these,  your attorney can explore settlement options or negotiate a manageable payment plan.

How Long Do I Have to Respond to a Subrogation Claim?

In Texas, the subrogation notice will specify a deadline to respond ranging from 30 to 90 days. It’s important to act quickly to avoid potential legal actions like a lawsuit or wage garnishment. Missing the deadline could lead to further complications. 

Can I Avoid Paying a Subrogation Claim?

Avoiding payment of a subrogation claim depends on your ability to dispute fault or the amount claimed. If you believe you are not responsible for the damage, you can present evidence to challenge the claim. If the amount being sought is inflated, you can dispute the claim with supporting documentation. In some cases, negotiating with the insurance company can result in a reduced settlement or a manageable payment plan. If another party was at fault, you may be able to redirect the claim to them. Seeking legal guidance can help when managing subrogation claims, increasing your likelihood of reducing or eliminating the payment owed. An attorney can assess the claim’s validity, and explore all available options for disputing or negotiating the amount. 

How Can a Property Damage Attorney Help Handle Subrogation Claims?

A property damage attorney can assist in managing subrogation claims by offering expert legal advice and guiding you through the intricate steps of the process. They will review the claim to ensure its accuracy, assess whether the amount is justified, and help protect your rights throughout the dispute. They can help:

Review the Claim: An attorney will thoroughly analyze the subrogation claim to determine whether the amount is reasonable or inflated and ensure it’s valid.

Dispute Fault or Amount: If you’re not at fault or if the claim amount seems excessive, a qualified attorney can gather evidence to dispute the claim on your behalf.

Negotiate Settlements: Lawyers are skilled negotiators who can work with the insurance company to potentially reduce the amount you owe or arrange a favorable settlement.

Represent You in Court: If the claim escalates to a lawsuit, an attorney will represent you in court. , advocating for your rights and ensuring the best possible outcome.

Overall, an attorney will protect your interests, ensure you don’t overpay, and handle the intricacies of subrogation of legal claims effectively.

What two laws are unique to Texas when it comes to subrogation? 

Texas subrogation law has two features that distinguish it from other states:

Made Whole Doctrine: In Texas, the “made whole” doctrine is important in subrogation claims. It prevents an insurance company from pursuing a subrogation claim until the insured party has been fully compensated for their damages. The insurer can’t recover from the at-fault party or their insurer if the insured hasn’t been fully “made whole” for their losses.

Right of Subrogation: The Texas Insurance Code supports subrogation rights through either contractual agreements or statutory provisions, allowing the insurer to recover from the responsible party once the claim is paid. 

Grisham & Kendall attorneys are experts in Texas subrogation laws. If you’ve received a subrogation notice and don’t know what to do, call us immediately for a complimentary consultation. We’ll analyze the subrogation claim and ensure your interests are protected by negotiating a fair settlement or representing you in court.