Subrogation is a concept that's well-known in insurance and legal circles but sometimes not by the customers they represent. Even if it sounds complicated, it would be to your advantage to know the steps of the process. The more you know about it, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you have is a commitment that, if something bad occurs, the company that covers the policy will make good in one way or another in a timely manner. If your vehicle is rear-ended, insurance adjusters (and the courts, when necessary) decide who was at fault and that party's insurance pays out.
But since determining who is financially accountable for services or repairs is usually a heavily involved affair – and time spent waiting often increases the damage to the victim – insurance firms often opt to pay up front and assign blame afterward. They then need a path to regain the costs if, once the situation is fully assessed, they weren't in charge of the payout.
Let's Look at an Example
You head to the emergency room with a sliced-open finger. You hand the receptionist your health insurance card and he writes down your plan information. You get taken care of and your insurer gets an invoice for the services. But on the following afternoon, when you clock in at your workplace – where the accident happened – you are given workers compensation paperwork to fill out. Your workers comp policy is in fact responsible for the costs, not your health insurance company. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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. Usually, 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 having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For starters, if you have a deductible, it wasn't just your insurer 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 unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its costs by increasing your premiums. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half to blame), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total loss 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 best attorney 23294, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not created equal. When comparing, it's worth measuring the reputations of competing firms to evaluate whether they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their customers informed 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 reputation 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.