Subrogation is a term that's well-known among legal and insurance firms but sometimes not by the customers who hire them. Rather than leave it to the professionals, it is in your self-interest to know the nuances of the process. The more knowledgeable you are about it, the more likely an insurance lawsuit will work out in your favor.
Every insurance policy you have is a promise that, if something bad occurs, the company that covers the policy will make restitutions in one way or another without unreasonable delay. If your house burns down, for instance, your property insurance agrees to compensate you or facilitate the repairs, subject to state property damage laws.
But since ascertaining who is financially responsible for services or repairs is typically a time-consuming affair – and delay in some cases adds to the damage to the victim – insurance firms in many cases opt to pay up front and assign blame after the fact. They then need a path to regain the costs if, when there is time to look at all the facts, they weren't actually in charge of the payout.
Can You Give an Example?
You head to the Instacare with a deeply cut finger. You give the receptionist your medical insurance card and she records your plan details. You get stitched up and your insurer is billed for the expenses. But on the following day, when you clock in at work – where the injury happened – you are given workers compensation forms to fill out. Your employer's workers comp policy is actually responsible for the payout, 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 process 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. Normally, 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 that was originally due to you, because it has covered the amount already.
Why Should I Care?
For one thing, if you have a deductible, it wasn't just your insurer that 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 choose to recoup its costs by ballooning your premiums. On the other hand, if it has a proficient legal team and goes after them efficiently, it is acting both in its own interests and in yours. If all ten grand 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 $500 back, depending on your state laws.
Moreover, if the total loss 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 car injury lawyer Canton, ga, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance agencies are not the same. When comparing, it's worth weighing the records of competing companies to determine whether they pursue winnable subrogation claims; if they resolve those claims quickly; if they keep their policyholders apprised as the case continues; 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 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.