Committee Kills Insurance Subrogation Bill
By Kealey Bultena
A measure that changes subrogation in South Dakota has died in committee. Subrogation is the process insurance companies go through to recoup money they paid out in claims.
Proponents of House Bill 1184 say current South Dakota law rewards insurance companies before compensating people who are hurt. That’s because state law dictates insurance companies can be repaid for their expenses before an individual gets any money for injury when the damage is someone else’s fault.
Opponents, including insurance lobbyist Justin Smith, say only companies doing their jobs recover some of their costs.
"Subrogation is in reality, it occurs by definition only in those cases where an insurance company – whether it be health or property or casualty or any kind – has followed through on its duty to its insured and actually paid benefits on behalf of its insured," Smith says.
Supporters of HB 1184 say a person who pays premiums shouldn’t be left without money for other damages when it isn’t his or her fault, especially because an insurance company gets money first. But opponents say premiums would go up if companies are last to recapture some expenses.
Four of the seven committee members voted to kill the legislation.
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