Subrogation is an idea that's understood among insurance and legal companies but rarely by the customers they represent. Even if you've never heard the word before, it would be in your benefit to know the steps of how it works. The more you know about it, the more likely it is that an insurance lawsuit will work out in your favor.
An insurance policy you own is an assurance that, if something bad happens to you, the firm on the other end of the policy will make good in one way or another in a timely fashion. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was at fault and that person's insurance pays out.
But since determining who is financially responsible for services or repairs is sometimes a confusing affair – and time spent waiting often adds to the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame afterward. They then need a means to get back the costs if, ultimately, they weren't actually responsible for the payout.
You rush into the hospital with a gouged finger. You give the nurse your health insurance card and she records your plan details. You get stitched up and your insurance company is billed for the expenses. But on the following morning, when you get to your place of employment – where the accident occurred – you are given workers compensation forms to file. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance. The latter has a right to recover its costs in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for making good on the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to get back its losses by ballooning your premiums. On the other hand, if it has a proficient legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, depending on your state laws.
Additionally, if the total loss of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as bk personal 66061, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not the same. When shopping around, it's worth scrutinizing the records of competing firms to find out whether they pursue winnable subrogation claims; if they do so in a reasonable amount of time; if they keep their policyholders advised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurance firm has a reputation of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.