The Things You Need to Know About Subrogation

Subrogation is a term that's understood among legal and insurance professionals but sometimes not by the people who employ them. Rather than leave it to the professionals, it would be to your advantage to comprehend the nuances of how it works. The more information you have about it, the more likely relevant proceedings will work out favorably.

An insurance policy you have is a promise that, if something bad occurs, the business that covers the policy will make restitutions in one way or another in a timely fashion. If you get hurt at work, your employer's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially responsible for services or repairs is sometimes a confusing affair – and delay often compounds the damage to the victim – insurance companies often decide to pay up front and figure out the blame after the fact. They then need a path to regain the costs if, once the situation is fully assessed, they weren't in charge of the payout.

Can You Give an Example?

You are in a highway accident. Another car ran into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was at fault and her insurance should have paid for the repair of your car. How does your company get its funds back?

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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurer 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.

Why Do I Need to Know This?

For a start, if your insurance policy stipulated a deductible, your insurer 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 timid on any subrogation case it might not win, it might opt to recoup its losses by ballooning your premiums and call it a day. On the other hand, if it has a capable legal team and pursues those cases efficiently, it is acting both in its own interests and in yours. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get half your deductible back, based on the laws in most states.

In addition, if the total cost 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 Auto accident Attorney in Mableton, Ga, pursue subrogation and succeeds, it will recover your expenses as well as its own.

All insurers are not the same. When shopping around, it's worth contrasting the reputations of competing agencies to determine if they pursue legitimate subrogation claims; if they do so fast; if they keep their clients advised as the case goes on; 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, instead, an insurer has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.