Hello and thank you for entrusting me to assist you, I will do everything I can to answer your question.
New Jersey law recognizes a legal doctrine known as the "made whole" rule, which provides that insurance companies do not have the right to be reimbursed until the plaintiff has been FULLY compensated for his or her injuries, absent a specific contractual stipulation to the contrary.
These days, most insurance companies do
have subrogation clauses which override the default "made whole" rule, but basic principles of equity still apply which dictate that an insurere must accept a proportionate sum of a plaintiff's settlement in satisfaction of their right to subrogration (the righ to be repaid).
Critial, however, is that the plaintiff and insurance company agree on an amount as payment in full in ADVANCE of the settlement being finalized. This is when the plaintiff has leverage, since the insurance company knows if they demand too much, the plaintiff has no motivation to continue pursuing the claim, as they would be doing so only to have the money go entirely or mostly to the insurer.
If the child in this circumstance does not yet have an attorney I emphatically
recommend that their parents retain one immediately. An injury of this magnitude is life-changing, and if settlement of the claim is not handled properly now it will impact the child for the rest of their life.
An experienced attorney will be able to effectively negotiate the child's medical bills and satisfy all outstanding liens on the child's settlement recovery while leaving a substantial "net" settlement for the child.
To locate a New Jersey personal injury attorney to assist with the claim, see here: http://www.martindale.com/personal-injury/s-new-jersey/all-lawyers.htm
Again, provided this situation is properly handled, the insurance companies should agree to a reduced sum in satisfaction of their subrogation rights, leaving the child with a signifiant net settlement.
Please do not hesitate
to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.
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