Auto Insurance Claims: Subrogation Claims, personal injury settlement, subrogation claims

Question
I had an accident a year ago when a uninsured driver ran a red light and I struck his vechicle causing considerable damage to both vechicles. My insurance company paid my $5,000 med pay beneifits and informed me there was no more funds. My wife's medical insurace company BC&BS paid the remaining medical bills over the next 5 months. My insurance company paid me for the totaling of my car and for pain and suffering for my back injuries sustained in the wreck. The medical insurnace company hired a subrogation claims company and they sent a letter to my insurance company informing them of their client's subrogation lien interest for all cost they paid for my medical services.

Can the subrogation claim company be allowed to deduct their amount from the settlement from my insurance company? It was my impression that they should wait until the third party was legally binded to settle the case with my insurance company and they get their money once it was collected from the third party.

My insurance company sent me a check with my name and the subrogation claims company name on it. They said they don't have to provide them a check, just make sure their name was listed on it and I should settle it with the claims company. How should I proceed?

Thanks. (Alabama)  

Answer
Hi Gerald,
It's becoming quiet common for health insurance companies to insert
a clause in their policy that requires you to reimburse them from any
personal injury settlement.

If such a clause exists in your wife's policy, they have every legal right to be reimbursed from the uninsured motorists settlement that you just received from your own company.

It has already been determined that the 3rd party is legally bound to pay your claim, but since the at fault driver was uninsured, the odds are also that he has no assets.  If taken through the expensive court system (which could take 3+ years) and you got an award from the court, it's still up to you to collect.  In most states, the driver could discharge the responsibility to pay you by filing for bankruptcy.

You need to contact your wife's health insurance company and arrange a meeting so you can sign the check over to them and have them give you a check for the difference or pay them by certified check and
have them endorse the check over to you.

I hope you find this information helpful.  Your feedback by rating my response will be appreciated.

Sincerely,
Bennie
San Francisco Bay Area