Subrogation and How It Affects You

Subrogation is an idea that's well-known among legal and insurance professionals but rarely by the customers who hire them. Even if you've never heard the word before, it is to your advantage to understand the steps of the process. The more information you have about it, the more likely relevant proceedings will work out in your favor.

An insurance policy you own is an assurance that, if something bad happens to you, the firm on the other end of the policy will make good in a timely manner. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) decide who was to blame and that party's insurance pays out.

But since determining who is financially responsible for services or repairs is often a tedious, lengthy affair – and time spent waiting sometimes adds to the damage to the victim – insurance companies in many cases opt to pay up front and assign blame after the fact. They then need a path to get back the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.

For Example

Your garage catches fire and causes $10,000 in home damages. Happily, you have property insurance and it pays for the repairs. However, the insurance investigator finds out that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him to blame for the loss. The home has already been fixed up in the name of expediency, but your insurance firm is out $10,000. What does the firm do next?

How Subrogation Works

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 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 to your person or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.

How Does This Affect the Insured?

For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its expenses by raising your premiums. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, depending on the laws in your state.

Moreover, if the total expense 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 personal injury attorney Bonney Lake WA, 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 looking at the records of competing companies to determine if they pursue valid subrogation claims; if they do so quickly; if they keep their clients informed as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your money 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 covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.


What Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is a term that's understood among legal and insurance professionals but often not by the people they represent. Even if it sounds complicated, it would be to your advantage to know the steps of how it works. The more knowledgeable you are about it, the better decisions you can make about your insurance company.

Every insurance policy you have 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 house suffers fire damage, your property insurance steps in to remunerate you or pay for the repairs, subject to state property damage laws.

But since figuring out who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and delay often adds to the damage to the policyholder – insurance firms usually opt to pay up front and figure out the blame later. They then need a method to recoup the costs if, when there is time to look at all the facts, they weren't responsible for the payout.

Let's Look at an Example

You head to the doctor's office with a gouged finger. You give the receptionist your medical insurance card and he writes down your policy details. You get stitched up and your insurance company gets an invoice for the expenses. But on the following day, when you clock in at your place of employment – where the accident occurred – your boss hands you workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the costs, not your medical insurance. The latter has a right to recover its money somehow.

How Does Subrogation Work?

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. Normally, only you can sue for damages 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 originally due to you, because it has covered the amount already.

Why Should I Care?

For one thing, if your insurance policy stipulated 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 – namely, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to get back its costs by ballooning your premiums. On the other hand, if it has a competent legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all 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 half your deductible back, depending on the laws in your state.

Moreover, if the total price 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 Personal injury attorney Tacoma Wa, pursue subrogation and succeeds, it will recover your losses in addition to its own.

All insurers are not the same. When comparing, it's worth looking at the reputations of competing agencies to find out whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients informed as the case continues; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, on the other hand, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.


What Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is a term that's well-known among insurance and legal companies but often not by the customers who hire them. Even if it sounds complicated, it is to your advantage to understand the steps of the process. The more information you have, the more likely it is that relevant proceedings will work out favorably.

Every insurance policy you own is a promise that, if something bad happens to you, the insurer of the policy will make good in one way or another in a timely manner. If your property is broken into, your property insurance agrees to pay you or facilitate the repairs, subject to state property damage laws.

But since determining who is financially accountable for services or repairs is often a time-consuming affair – and delay often compounds the damage to the victim – insurance firms usually opt to pay up front and figure out the blame later. They then need a way to regain the costs if, ultimately, they weren't responsible for the payout.

Let's Look at an Example

You are in a traffic-light accident. Another car collided with yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was entirely to blame and her insurance policy should have paid for the repair of your auto. How does your insurance company get its funds back?

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 person or property. But under subrogation law, your insurance company is considered to have 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 the Insured?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 insurer is lax about bringing subrogation cases to court, it might opt to get back its losses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full $1,000 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 expense 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 Personal injury attorney near me Sumner WA, pursue subrogation and wins, it will recover your expenses in addition to its own.

All insurance companies are not created equal. When comparing, it's worth looking at the records of competing agencies to find out whether they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their clients posted as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurance agency has a reputation of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.


The Things Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is a concept that's well-known among legal and insurance companies but sometimes not by the customers they represent. Even if it sounds complicated, it is in your benefit to know the nuances of how it works. The more knowledgeable you are about it, the better decisions you can make about your insurance policy.

An insurance policy you own is a commitment that, if something bad occurs, the insurer of the policy will make restitutions in one way or another in a timely manner. If your vehicle is rear-ended, insurance adjusters (and the courts, when necessary) determine who was at fault and that person's insurance covers the damages.

But since determining who is financially accountable for services or repairs is regularly a confusing affair – and time spent waiting often increases the damage to the victim – insurance companies in many cases opt to pay up front and figure out the blame after the fact. They then need a mechanism to recoup the costs if, ultimately, they weren't responsible for the payout.

Can You Give an Example?

Your electric outlet catches fire and causes $10,000 in house damages. Luckily, you have property insurance and it pays for the repairs. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him responsible for the damages. You already have your money, but your insurance agency is out $10,000. What does the agency do next?

How Subrogation Works

This is where subrogation comes in. It is the way 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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.

How Does This Affect Me?

For a start, if you have a deductible, your insurer 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 – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to get back its losses by raising your premiums and call it a day. On the other hand, if it has a proficient legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get $500 back, depending on the laws in your state.

In addition, if the total loss 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 personal injury lawyer Puyallup WA, successfully press a subrogation case, it will recover your losses as well as its own.

All insurers are not the same. When shopping around, it's worth contrasting the reputations of competing firms to evaluate if they pursue valid subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their customers apprised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your money 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 covering its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.


The Things Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood among insurance and legal companies but sometimes not by the customers they represent. Even if it sounds complicated, it is in your self-interest to comprehend the nuances of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out favorably.

An insurance policy you have is a promise that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If you get an injury at work, for example, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.

But since ascertaining who is financially responsible for services or repairs is regularly a confusing affair – and delay in some cases increases the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame afterward. They then need a method to get back the costs if, once the situation is fully assessed, they weren't in charge of the expense.

Let's Look at an Example

You go to the emergency room with a gouged finger. You give the receptionist your health insurance card and she writes down your plan details. You get stitches and your insurance company gets a bill for the expenses. But the next morning, when you arrive at work – where the accident happened – you are given workers compensation forms to file. Your employer's workers comp policy is in fact responsible for the expenses, not your health insurance. It has a vested interest in getting that money back somehow.

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. Usually, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have 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 a start, if you have a deductible, it wasn't just your insurance company 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 insurance company is lax about bringing subrogation cases to court, it might opt to recover its losses by increasing your premiums. On the other hand, if it has a competent legal team and goes after those cases aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get half your deductible back, depending on the laws in your state.

Furthermore, if the total expense 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 Middle River MD, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurers are not created equal. When shopping around, it's worth contrasting the reputations of competing companies to evaluate whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their customers updated as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its income by raising your premiums, you should keep looking.