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Collision Coverage and the Right to Subrogate for No-Fault Accident

With no-fault collision insurance coverage, the insurance company pays for your car repair damages, regardless of who was at fault for causing an accident. Depending on a state’s statutes and case laws, insurance companies may or may not have the right to subrogate (be reimbursed for covering damages) by suing an at-fault third party (individual responsible for causing the accident). North Carolina is not a no-fault insurance state. However, in Virginia, which does have no-fault insurance, the policy holder also has the right to sue the at-fault party.

Under Virginia statute § 4.47[1] Subrogation Rights, Virginia courts allow subrogation "to prevent the unjust enrichment of plaintiffs who would otherwise be doubly compensated." However under the same statute, any insurance policy that provides hospital, medical, surgical and similar related benefits is not subject to subrogation. This means that the insurance company can subrogate for collision damages, but not for bodily injury damages. If you carry collision insurance and you sue the other driver and receive compensation for car damage, and your insurance company already paid you for collision damages, it can subrogate to recover compensation from the money you received from the third party.

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