Subrogation is a term that's well-known in legal and insurance circles but often not by the people who hire them. Even if it sounds complicated, it would be in your self-interest to comprehend the steps of the process. The more you know about it, the more likely an insurance lawsuit will work out favorably.
Every insurance policy you hold is a promise that, if something bad occurs, the business on the other end of the policy will make restitutions in one way or another in a timely manner. If your property burns down, for instance, your property insurance steps in to remunerate you or pay for the repairs, subject to state property damage laws.
But since determining who is financially responsible for services or repairs is typically a time-consuming affair – and delay sometimes compounds the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame afterward. They then need a mechanism to recoup the costs if, when all is said and done, they weren't actually in charge of the expense.
Can You Give an Example?
You arrive at the Instacare with a deeply cut finger. You give the nurse your medical insurance card and he takes down your policy information. You get stitched up and your insurer is billed for the medical care. But the next morning, when you get to your place of employment – where the injury happened – you are given workers compensation forms to fill out. Your workers comp policy is in fact responsible for the bill, not your medical insurance policy. 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 method 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. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurer 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.
How Does This Affect Policyholders?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer who 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 insurance company is timid on any subrogation case it might not win, it might opt to recover its losses by upping your premiums and call it a day. On the other hand, if it has a competent legal team and pursues 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 thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total cost of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as auto accident lawyer Mableton GA, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not the same. When comparing, it's worth looking at the reputations of competing agencies to find out if they pursue legitimate subrogation claims; if they resolve those claims quickly; 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 money back and move on with your life. If, instead, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.