Subrogation is a concept that's well-known among legal and insurance companies but rarely by the customers who hire them. Rather than leave it to the professionals, it is in your self-interest to comprehend an overview of how it works. The more information you have about it, the better decisions you can make with regard to your insurance policy.
Every insurance policy you own is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another in a timely fashion. If your property is broken into, your property insurance steps in to remunerate you or facilitate the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is typically a time-consuming affair – and time spent waiting sometimes adds to the damage to the policyholder – insurance firms usually decide to pay up front and assign blame afterward. They then need a means to regain the costs if, in the end, they weren't actually responsible for the payout.
Can You Give an Example?
You go to the doctor's office with a sliced-open finger. You hand the nurse your medical insurance card and she records your coverage details. You get taken care of and your insurance company gets a bill for the services. But the next morning, when you get to your place of employment – where the injury occurred – you are given workers compensation forms to file. Your company's workers comp policy is in fact responsible for the hospital trip, not your medical insurance company. 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 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. Normally, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given 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 one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its expenses by increasing your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after them enthusiastically, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get $500 back, based on the laws in most states.
In addition, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as truck accident lawyers Dunwoody ga, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurers are not the same. When shopping around, it's worth looking at the records of competing firms to find out whether they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their policyholders advised as the case continues; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, on the other hand, an insurance agency has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.