Subrogation is an idea that's understood in insurance and legal circles but often not by the customers who employ them. Rather than leave it to the professionals, it would be in your self-interest to comprehend the steps of the process. The more you know about it, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you have is an assurance that, if something bad happens to you, the company on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your vehicle is rear-ended, insurance adjusters (and the judicial system, when necessary) decide who was at fault and that person's insurance pays out.
But since determining who is financially responsible for services or repairs is usually a time-consuming affair – and delay often adds to the damage to the policyholder – insurance firms usually opt to pay up front and figure out the blame later. They then need a mechanism to recover the costs if, ultimately, they weren't actually responsible for the payout.
For Example
Your stove catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays out your claim in full. However, the assessor assigned to your case finds out that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him responsible for the loss. The house has already been repaired in the name of expediency, but your insurance agency is out all that money. What does the agency do next?
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 done to your person or property. But under subrogation law, your insurer is considered to have 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 Should I Care?
For a start, 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 the tune of $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its losses by boosting your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them efficiently, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, based on the laws in most states.
Moreover, if the total cost of an accident is more than 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 attorney Hillsboro OR, pursue subrogation and wins, it will recover your expenses as well as its own.
All insurance agencies are not the same. When shopping around, it's worth looking at the records of competing agencies to evaluate if they pursue winnable subrogation claims; if they do so fast; if they keep their accountholders updated as the case goes on; 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 insurance company has a reputation of honoring claims that aren't its responsibility and then covering its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.