Subrogation is a concept that's well-known in insurance and legal circles but often not by the customers who hire them. Rather than leave it to the professionals, it is in your benefit to comprehend an overview of the process. The more you know, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you have is a promise that, if something bad occurs, the firm that insures the policy will make good in one way or another without unreasonable delay. If you get an injury while you're on the clock, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is typically a tedious, lengthy affair – and time spent waiting often compounds the damage to the victim – insurance firms often decide to pay up front and assign blame afterward. They then need a method to recoup the costs if, when there is time to look at all the facts, they weren't in charge of the payout.
Can You Give an Example?
You are in a highway accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely to blame and his insurance policy should have paid for the repair of your auto. How does your insurance company get its funds back?
How Subrogation Works
This is where subrogation comes in. It is the way that an insurance company uses to claim payment 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. Ordinarily, only you can sue for damages to your person or property. But under subrogation law, your insurer is given some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For one thing, if you have a deductible, your insurer wasn't the only one that 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 lax about bringing subrogation cases to court, it might opt to get back its expenses by ballooning your premiums. On the other hand, if it knows which cases it is owed and pursues them efficiently, it is doing you a favor as well as itself. If all is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as Auto accident lawyer Norcross GA, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurers are not the same. When shopping around, it's worth scrutinizing the records of competing companies to find out if they pursue valid subrogation claims; if they resolve those claims without delay; if they keep their clients advised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your deductible back and move on with your life. If, on the other hand, an insurance company has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.