New Mexico Personal Injury Lawyer Blog

Obviously, the most important settlement consideration to the plaintiff in a personal injury case is his/her net recovery. Therefore, the plaintiff's attorney must understand the role of the various parties who make a claim against the settlement proceeds. The plaintiff's net recovery is enhanced by proper handling of these claims. In addition, the plaintiff must be aware of the potential consequences of not handling these claims correctly.
Subrogation arises between an insurer and its insured, allowing the insurer to recover payments against the person who caused the loss. Subrogation “allows an insurer who has fully compensated the insured to step into the shoes of the insured and collect what it has paid from the wrongdoer.” Amica Mut. Ins. Co. of Ariz. v. Maloney, 120 N.M. 523, 527, 903 P.2d 834, 838 (1995). Subrogation arises “by operation of law.” Safeco Ins. Co. of America v. U.S. Fid. & Guar. Co., 101 N.M. 148, 149, 679 P.2d 816, 817 (1995). Subrogation also arises in the suretyship context. See NM State Highway & Transp. Dep’t v. Gulf Ins. Co., 2000-NMCA-007, ¶11, 128 N.M. 634, 996 P.2d 424.

New Mexico has applied subrogation principles only in disputes involving insurers. Gulf Insurance Co. v. Cottone, 2006-NMCA-150, ¶11, 140 N.M. 728, 148 P.3d 814. Cottone arose from a chain reaction auto accident. A person injured in the accident sued (only) a driver, insured by Gulf Insurance Co. Gulf then sought reimbursement from others allegedly at fault for the accident. Gulf argued it became subrogated to the claims of the injured party when it settled with her. The court rejected this attempt to expand the concept of subrogation, which traditionally has been limited to insurance companies that had paid their own insureds. The reasons for this rejection were (1) the doctrine of comparative fault meant that Gulf had only paid damages by which its insured was responsible and, therefore, had no claim against the other parties, (2) New Mexico does not allow an assignment of personal injury claims, and (3) the release signed by the injured party did not release anyone other than Gulf’s insured.
An insurance company providing uninsured or underinsured motorist coverage is entitled to reimbursement out of the proceeds of any recovery which might be obtained from the person(s) responsible for the accident (the “tortfeasors”). See NMAC, Dept. of Insurance Regulations, §12.3.17.9.2. The company also has a subrogation right, and may sue the uninsured tortfeasor to recover any amounts it may have paid. Id, §12.3.17.9.4. The insured must cooperate in any subrogation suit brought by the carrier, and the carrier could compel joinder of an uncooperative insured to serve as an “involuntary plaintiff.” §12.3.17.9.11.
Special considerations apply in workers compensation cases. If the employer paid the premiums for the uninsured motorist coverage, reimbursement is handled normally. See Section 52-5-17C. (As a practical matter, most employers have figured out that they can opt not to have uninsured motorist coverage to cover their employees.) On the other hand, if the worker pays the premiums of the uninsured motorist coverage, the employee is not required to reimburse the workers’ compensation carrier. Id. Moreover, this subsection does not entitle the UM carrier to a credit or offset for the amount of workers’ compensation benefit paid to the worker. Mountain States Mut. Cas. Co. v. Vigil, 1996-NMCA-062, 121 N.M. 812, 918 P.2d 728.

New Mexico is far from the richest state in the nation. New Mexico residents rarely have substantial assets buried in their back yard that can compensate New Mexico accident victims for their injuries. As a result, the financial recovery available to New Mexico car accident victims is often limited to the insurance policies in effect at the time.

Unless the negligent driver has substantial assets to cover the injuries caused by the accident, many times the biggest question for serious car accidents or New Mexico wrongful death cases, is what is the available limits of insurance. Answering this question typically requires obtaining the other driver’s insurance policy. However, if the accident victim has any New Mexico uninsured or underinsured coverage, than a simple review of the policies can shed some light on what the minimum available limits may be.

If you have been injured in a New Mexico accident, you can check your own insurance to see if you see the letters “UM” or “UIM” next to various numbers. If you see these letter, it means that you have uninsured or underinsured motorist coverage that if necessary can be used to help in the recovery. Next to these letters you will see two numbers separated by a “/”, such as “25/50” or “100/200.” Whatever these numbers may be, they are your policy limits on that particular vehicle. The way to read these figures is to look at the first number which indicates the most that any single person is able to recover from injuries resulting from the accident, and the second number which is the most that can ever be paid by the insurance company for the accident.

Before looking at your New Mexico insurance policy and thinking you figured everything out, it is important to be familiar, or at least talk to somebody who is familiar, with New Mexico uninsured motorist law. Under New Mexico law, a car accident victim may be entitled to use other insurance policies beyond those in effect on the vehicle that was involved in the accident, to recover additional money. For this reason, it is highly recommended to speak with an experienced New Mexico car accident lawyer before contemplating, let alone accepting, any offer for a car accident case.

The American Association of Justice recently released the results of a survey of the nation's worst insurance companies. Although all of the notorious New Mexico insurance companies are not on the list, some do appear. The study focuses on court documents, testimony, complaints filed, news accounts, and FBI records.

Client's often times do not understand the importance of an insurance company in a New Mexico auto accident case, but often times the insurance company will determine the pace and direction of the case. There are some New Mexico insurance companies whom an experienced New Mexico injury lawyer knows that it will be necessary to file a lawsuit against. Other insurance companies are easier to work with and will resolve much earlier. Being aware of the the style of the insurance company you are going up against is crucial to begin the case and get it moving in the right direction.

As far as the list goes, according to the American Association of Justice, Allstate, Farmers, and Liberty Mutual scored some of the worst scores and are more likely than not to result in a bumpy litigation road. If you are unsure of how your insurance company compares with the rest, it may be worth speaking with a New Mexico injury lawyer regarding what can be done.