Subrogation is an idea that's well-known among insurance and legal professionals but often not by the people who hire them. Rather than leave it to the professionals, it is in your self-interest to comprehend an overview of how it works. The more information you have, the better decisions you can make about your insurance company.
Every insurance policy you have is a commitment that, if something bad occurs, the company that covers the policy will make restitutions without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the judicial system, when necessary) determine who was at fault and that party's insurance covers the damages.
But since determining who is financially accountable for services or repairs is regularly a heavily involved affair – and delay sometimes adds to the damage to the victim – insurance firms often opt to pay up front and assign blame afterward. They then need a mechanism to recover the costs if, ultimately, they weren't actually responsible for the expense.
You go to the emergency room with a sliced-open finger. You give the nurse your health insurance card and he takes down your policy information. You get stitched up and your insurance company gets a bill for the services. But the next afternoon, when you get to your workplace – where the injury happened – your boss hands you workers compensation forms to fill out. Your workers comp policy is actually responsible for the expenses, not your health insurance company. It has a vested interest in getting that money back somehow.
How Subrogation Works
This is where subrogation comes in. It is the process 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. Usually, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is given some of your rights in exchange for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
For starters, if your insurance policy stipulated a deductible, your insurance company wasn't the only one 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 recoup its costs by boosting your premiums and call it a day. On the other hand, if it has a capable legal team and pursues those cases enthusiastically, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get half your deductible back, depending on the laws in your state.
Additionally, if the total loss 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 criminal law defense lawyer Portland OR, successfully press a subrogation case, it will recover your costs in addition to its own.
All insurers are not the same. When shopping around, it's worth measuring the reputations of competing companies to determine if they pursue legitimate subrogation claims; if they resolve those claims fast; if they keep their accountholders posted as the case continues; 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 insurer has a reputation of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, you should keep looking.
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