Subrogation is a concept that's understood in legal and insurance circles but often not by the customers they represent. Even if you've never heard the word before, it would be in your benefit to understand an overview of the process. The more information you have about it, the better decisions you can make with regard to your insurance company.
Any insurance policy you own is an assurance that, if something bad occurs, the firm on the other end of the policy will make restitutions in a timely fashion. If a blizzard damages your house, your property insurance steps in to repay you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially accountable for services or repairs is usually a tedious, lengthy affair – and time spent waiting often increases the damage to the victim – insurance companies in many cases opt to pay up front and assign blame afterward. They then need a mechanism to recover the costs if, when all is said and done, they weren't actually responsible for the expense.
Let's Look at an Example
You head to the doctor's office with a deeply cut finger. You give the nurse your medical insurance card and she writes down your plan information. You get taken care of and your insurer gets a bill for the services. But the next afternoon, when you arrive at your place of employment – where the injury happened – you are given workers compensation paperwork to fill out. Your company's workers comp policy is in fact responsible for the bill, not your medical insurance company. The latter has an interest in recovering its money somehow.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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 insurer is extended some of your rights for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
How Does This Affect the Insured?
For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recoup its expenses by ballooning your premiums and call it a day. On the other hand, if it has a competent legal team and pursues them enthusiastically, it is doing you a favor as well as itself. 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 to blame), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total cost 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 car injury lawyer Canton, ga, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurers are not the same. When comparing, it's worth looking at the records of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their customers advised as the case goes on; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.