The Things Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood in legal and insurance circles but sometimes not by the policyholders they represent. Even if it sounds complicated, it would be in your self-interest to understand an overview of the process. The more you know about it, the better decisions you can make about your insurance company.

An insurance policy you hold is a promise that, if something bad occurs, the firm on the other end of the policy will make restitutions without unreasonable delay. If you get an injury on the job, your company's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially accountable for services or repairs is regularly a confusing affair – and time spent waiting in some cases increases 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, ultimately, they weren't actually responsible for the payout.

Can You Give an Example?

You are in a highway 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 car. How does your company get its funds back?

How Subrogation Works

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 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 considered to have some of your rights for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.

Why Does This Matter to Me?

For a start, if you have 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 – to be precise, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by boosting your premiums. On the other hand, if it has a competent legal team and pursues those cases aggressively, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get $500 back, based on the laws in most states.

Additionally, if the total price 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 worker compensation terms Smyrna GA, pursue subrogation and succeeds, it will recover your expenses as well as its own.

All insurance companies are not the same. When comparing, it's worth weighing the reputations of competing agencies to find out whether they pursue winnable subrogation claims; if they resolve those claims quickly; if they keep their accountholders apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding 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 protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.


The Things You Need to Know About Subrogation

Subrogation is a term that's well-known among legal and insurance professionals but rarely by the policyholders who employ them. 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 with regard to your insurance company.

An insurance policy you have is an assurance that, if something bad occurs, the company that covers the policy will make good in one way or another without unreasonable delay. If your house suffers fire damage, for instance, your property insurance steps in to pay you or enable the repairs, subject to state property damage laws.

But since figuring out who is financially responsible for services or repairs is usually a confusing affair – and delay in some cases adds to the damage to the policyholder – insurance companies usually decide to pay up front and figure out the blame afterward. They then need a mechanism to recoup the costs if, in the end, they weren't actually responsible for the payout.

Let's Look at an Example

You arrive at the doctor's office with a sliced-open finger. You give the receptionist your health insurance card and she writes down your plan details. You get stitches and your insurer is billed for the services. But on the following morning, when you arrive at your place of employment – where the accident occurred – you are given workers compensation forms to file. Your company's workers comp policy is in fact responsible for the expenses, not your health insurance company. The latter has a right to recover its costs somehow.

How Does Subrogation Work?

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. 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 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 Individuals?

For starters, if you have 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 unconcerned with pursuing subrogation even when it is entitled, it might choose to recoup its expenses by increasing your premiums. On the other hand, if it has a competent legal team and pursues those cases aggressively, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get half your deductible back, depending on the laws in your state.

Furthermore, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as workers comp attorney Milton, ga, pursue subrogation and succeeds, it will recover your expenses in addition to its own.

All insurance agencies are not created equal. When shopping around, it's worth contrasting the reputations of competing companies to find out whether they pursue winnable subrogation claims; if they resolve those claims quickly; if they keep their policyholders advised as the case continues; and if they then process successfully won reimbursements quickly so that you can get your deductible back and move on with your life. If, on the other hand, an insurance agency has a record of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you'll feel the sting later.