Subrogation is an idea that's well-known among insurance and legal firms but sometimes not by the people who employ them. Even if you've never heard the word before, it is in your benefit to know the steps of how it works. The more knowledgeable you are, the more likely an insurance lawsuit will work out favorably.
Any insurance policy you own is a promise that, if something bad occurs, the company on the other end of the policy will make good in a timely fashion. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) decide who was at fault and that party's insurance covers the damages.
But since determining who is financially accountable for services or repairs is typically a confusing affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies usually decide to pay up front and figure out the blame afterward. They then need a mechanism to get back the costs if, when there is time to look at all the facts, they weren't responsible for the payout.
For Example
You are in an auto accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was at fault and her insurance policy should have paid for the repair of your car. How does your company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the process 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. Normally, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is extended some of your rights in exchange for making good on the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
For a start, if your insurance policy stipulated 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 timid on any subrogation case it might not win, it might choose to recover its costs by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get half your deductible back, depending on your state laws.
Additionally, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as immigration lawyer near me Sandy Ut, successfully press a subrogation case, it will recover your losses as well as its own.
All insurance agencies are not the same. When shopping around, it's worth comparing the records of competing firms to find out if they pursue winnable subrogation claims; if they do so fast; if they keep their account holders advised as the case continues; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.