Subrogation is a concept that's well-known in insurance and legal circles but rarely by the people who employ them. Rather than leave it to the professionals, it is to your advantage to understand the steps of the process. The more information you have, the more likely an insurance lawsuit will work out in your favor.
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 manner. If your house is burglarized, for example, your property insurance agrees to pay you or enable the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is regularly a confusing affair – and time spent waiting in some cases increases the damage to the victim – insurance firms usually opt to pay up front and assign blame later. They then need a way to regain the costs if, when all the facts are laid out, they weren't responsible for the expense.
Can You Give an Example?
You go to the emergency room with a gouged finger. You give the receptionist your health insurance card and he writes down your policy details. You get taken care of and your insurance company gets a bill for the expenses. But the next afternoon, when you clock in at your workplace – where the accident occurred – you are given workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance policy. It has a vested interest in getting that money back in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the way 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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company 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.
Why Does This Matter to Me?
For a start, if you have a deductible, it wasn't just your insurance company that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to recover its costs by upping your premiums and call it a day. On the other hand, if it has a competent legal team and pursues those cases aggressively, it is doing you a favor as well as itself. If all is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as auto accident attorney Mableton GA, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance agencies are not created equal. When comparing, it's worth looking at the reputations of competing companies to find out if they pursue winnable subrogation claims; if they do so without delay; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible 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 profit margin by raising your premiums, you should keep looking.