Subrogation is an idea that's understood among legal and insurance companies but rarely by the people who hire them. Even if it sounds complicated, it is in your self-interest to understand an overview of the process. The more knowledgeable you are about it, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you hold is an assurance that, if something bad occurs, the company that covers the policy will make good in one way or another in a timely fashion. If your property is robbed, your property insurance steps in to remunerate you or pay for the repairs, subject to state property damage laws.
But since ascertaining who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and time spent waiting sometimes increases the damage to the victim – insurance firms often opt to pay up front and assign blame afterward. They then need a means to recover the costs if, ultimately, they weren't responsible for the expense.
Let's Look at an Example
You are in a car accident. Another car crashed into yours. The police show up to assess the situation, you exchange insurance information, 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 at fault and her insurance policy should have paid for the repair of your vehicle. How does your company get its money back?
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 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 person or property. But under subrogation law, your insurance company 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 the Insured?
For one thing, 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 have a stake in the outcome as well – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to get back its expenses by raising your premiums. On the other hand, if it has a competent legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. 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 one-half accountable), you'll typically get half your deductible back, depending on the laws in your state.
Moreover, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as truck accident lawyers Milton, ga, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurance agencies are not the same. When shopping around, it's worth examining the records of competing firms to determine if they pursue legitimate subrogation claims; if they do so fast; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements right away so that you can get your deductible 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 profit margin by raising your premiums, you should keep looking.