Subrogation is a term that's understood among insurance and legal professionals but sometimes not by the customers who hire them. Even if you've never heard the word before, it would be to your advantage to comprehend an overview of the process. The more information you have about it, the more likely relevant proceedings will work out favorably.
Any insurance policy you hold is a commitment that, if something bad happens to you, the firm that insures the policy will make good in one way or another in a timely fashion. If a windstorm damages your property, for instance, your property insurance steps in to pay you or enable the repairs, subject to state property damage laws.
But since ascertaining who is financially accountable for services or repairs is regularly a heavily involved affair – and time spent waiting in some cases increases the damage to the victim – insurance firms often opt to pay up front and assign blame after the fact. They then need a mechanism to recover the costs if, when all is said and done, they weren't in charge of the expense.
Let's Look at an Example
You rush into the doctor's office with a gouged finger. You give the nurse your health insurance card and he records your policy information. You get taken care of and your insurance company gets a bill for the tab. But the next morning, when you get to work – where the accident occurred – you are given workers compensation forms to file. Your workers comp policy is actually responsible for the invoice, not your health insurance. The latter has a right to recover its costs in some way.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 to your self 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.
How Does This Affect the Insured?
For a start, if you have a deductible, your insurance company 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 the tune of $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its expenses by boosting your premiums. On the other hand, if it has a knowledgeable legal team and pursues those cases aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total expense 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 auto wreck lawyer Washington DC, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance agencies are not the same. When comparing, it's worth examining the records of competing companies to determine whether they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their clients advised as the case proceeds; 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 insurer has a record of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you should keep looking.