Subrogation is a concept that's well-known among insurance and legal professionals but rarely by the people who hire them. Rather than leave it to the professionals, it would be in your benefit to comprehend the steps of how it works. The more knowledgeable you are, the more likely relevant proceedings will work out in your favor.
An insurance policy you have is a promise that, if something bad happens to you, the business that covers the policy will make good in one way or another in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was at fault and that person's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is typically a confusing affair – and time spent waiting in some cases increases the damage to the policyholder – insurance companies usually decide 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 expense.
Can You Give an Example?
You arrive at the hospital with a gouged finger. You hand the receptionist your medical insurance card and she writes down your coverage information. You get stitches and your insurance company gets a bill for the tab. But on the following day, when you arrive at work – where the accident happened – you are given workers compensation forms to file. Your company's workers comp policy is in fact responsible for the expenses, not your medical insurance. It has a vested interest in getting that money back in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement when it pays out a claim that turned out not to be its responsibility. Some insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given some of your rights for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.
How Does This Affect Me?
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 be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recoup its losses by upping your premiums. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total price of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as worker compensation terms Lithia Springs GA, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not the same. When shopping around, it's worth looking up the reputations of competing firms to find out if they pursue legitimate subrogation claims; if they resolve those claims quickly; if they keep their policyholders informed as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, on the other hand, an insurance firm has a reputation of paying out claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.