There was a property damage accident to our classic car, the party at fault insurance paid out, and was not enough to fix the car, so our insurance sent us a check. We were never told we could take one and not the other. Now 3 years later we got a letter from our insurance saying we have to pay the amount to them which the other insurance paid us-because they settled and the amount of 3kas subtracted from the settlement. If we do not pay within 10 days they will use. Please help, we do not have 3k to pay them. What can we do?


Generally, in personal injury cases under the California Law, the individual who personally suffered the injury is the real party in interest entitled to maintain suit. As an exception, A person or entity obligated to pay for a loss caused by another may, by virtue of the payment, become subrogated to whatever claim the payee has against the person causing the loss. For example, in the personal injury context, an insurance company which pays its insured for injuries caused by a third person is subrogated to the insured’s claim against that third person [ State Farm Gen. Ins. Co. v. ells Fargo Bank, N.A. (2006)]. Such payment, in effect, operates as an assignment by operation of law of the injured party’s claim, and the insurance-company subrogee/assignee is thereafter the real party in interest on the claim [Automobile Ins. Co. of Hartford, Conn. v. Union Oil Co. (1948)].

Emotional distress damages are recoverable in a “bad faith” action brought by an insured against his or her insurer but only when the insured establishes actual financial loss resulting from the insurer’s breach of the covenant of good faith and fair dealing. Simple delay in payment, absent other egregious circumstances, does not constitute sufficient injury to support emotional distress damages[Waters v. United Services Auto. Ass’n (1996)]. Moreover, when an insurance carrier becomes subrogated to the claim of an insured against a third party tortfeasor, the payment of insurance proceeds is no longer a ‘collateral source.’ Where both the subrogee [insurer] and subrogor [insured] have a right of action against the tortfeasor  the tortfeasor would have potential double liability if payment of insurance benefits by the subrogee to the subrogor is allowed to be designated a ‘collateral source’ [ Ferraro v. Southern Calif. Gas. Co,]. It would be best to seek personal assistance from a lawyer in order to help you with your personal injury case.

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