If you have heard the term “segregation,” then it has likely been brought up when dealing with health insurance carrier claims on a personal injury settlement. Soon after a person has been involved in an accident that was caused by another party, they will likely receive a letter from the health insurance carrier asking for details about the incident. In particular, the health insurance carrier will want to know whether there was a third party involved (another driver, an employer, etc.) as well as the name of the insurance carrier of the at-fault party. The insurance company will likely also remind an injured person that the carrier has the right to recover reimbursement for what they payout if you recover any money through a personal injury settlement or jury verdict from the at-fault party.
The idea behind subrogation is that your insurance is there to protect you and provide coverage if you have been injured or become ill. If you are injured by a third party, your insurance carrier will provide coverage for the initial medical expenses while the details of liability and damages are sorted out in a personal injury claim. However, the insurance carrier will typically assert that they have the right to be reimbursed for expenses they payout in connection with your treatment from any eventual settlement you receive.
Simply put, your insurance carrier will cover you after an initial injury caused by another party, but the insurance carrier wants that money back when you receive compensation from the at-fault party.