Subrogation is a term that's understood among legal and insurance professionals but often not by the people they represent. Rather than leave it to the professionals, it would be in your benefit to understand the nuances of the process. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.
Every insurance policy you hold is a promise that, if something bad occurs, the insurer of the policy will make restitutions in a timely manner. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) determine who was to blame and that party's insurance covers the damages.
But since ascertaining who is financially accountable for services or repairs is regularly a heavily involved affair a€" and delay sometimes increases the damage to the victim a€" insurance firms usually decide to pay up front and figure out the blame after the fact. They then need a path to get back the costs if, once the situation is fully assessed, they weren't responsible for the expense.
Let's Look at an Example
You rush into the doctor's office with a sliced-open finger. You hand the receptionist your medical insurance card and he records your plan information. You get taken care of and your insurance company is billed for the medical care. But the next afternoon, when you get to work a€" where the injury occurred a€" you are given workers compensation forms to turn in. Your workers comp policy is in fact responsible for the bill, not your medical insurance policy. The latter has an interest in recovering its money in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the method 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 given some of your rights 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.
How Does This Affect Individuals?
For starters, 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 have a stake in the outcome as well a€" to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recover its losses by increasing your premiums. On the other hand, if it has a capable legal team and goes after those cases efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as worker compensation terms Canton GA, pursue subrogation and succeeds, it will recover your expenses as well as its own.
All insurance companies are not the same. When shopping around, it's worth comparing the reputations of competing agencies to determine if they pursue legitimate subrogation claims; if they do so fast; if they keep their clients posted as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurance company has a record of paying out claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.