Let' say you leave your car parked on the street overnight and some low-down rotten bastid side-swipes it and takes off.
If you only have basic liability auto insurance coverage, you are out of luck and have to pay out of pocket for repairs. But if you have comprehensive coverage that includes damage from hit-and-runs or uninsured motorists, then your auto insurance company will pay for the damages.
Let's say the total cost is $5,000, and your insurance company promptly cuts you a check for that amount. You call a body shop and schedule an appointment for the following week.
The next day the local police dept. calls and says they've arrested the driver who hit your car in a separate incident and that they also have proof that he damaged your car. Amazingly, the police tell you that he is insured and gives you his policy information so you can file a claim. His insurance company looks at your car and offers to write you a check for $5,000.
So now you've been paid twice for the accident: once by your insurance company, whom you had a contract with stating if no one can be found at fault for an accident, they have you covered. Then again by the guilty-party's insurance company, because they are legally required to do so.
$10,000 for a $5,000 accident. Awesome huh?? Um. No. Because now YOUR insurance company wants their $5,000 back because there's a clause in your policy that states they are entitled to their money back if you are rewarded damages from the original guilty party.
This is pretty much what has happened to the Shankses. It's called
subrogation.
Mrs. Shank had a policy with Walmart. In plain English, it basically says, "if you are in a horrible accident and you can't get anyone to pay your hospital bills, we will cover it." BUT it also says, "but if/when you sue someone and are awarded money from a settlement, then we want that money back".
The idea is that people don't need to be paid TWICE if something bad happens to them. All that does is drive up the cost of insurance for
everybody.
The Wall Street Journal has a
much better, more
objective and fact filled article about this incident
here.
It sucks what happened to Mrs. Shank. Totally. Because the trucking company who hit her should have paid out a lot more money than they did. But they were only insured for up to 1 million. And it seems pretty typical for injury settlements to come short after all the legal fees have been paid.
I'm actually thinking that the Shanks' attorney probably screwed up when he thought Walmart wasn't going to try getting that money back. They probably should have squeezed the trucking co. for more.
However, Walmart has a right to their money back. It's in the contact. It is an industry standard practice. It is perfectly legal and as far as I'm concerned, not unethical at all.
..Ironically, she probably would have made out a lot better (moneywise, anyway) if it was a Walmart truck that hit her. I'm sure those trucks are covered for much more than 1 mil.
M
I doubt they just had brain fart and decided to pay her medical bills without having the clauses in mind.
