Subrogation is a term that's understood among legal and insurance professionals but rarely by the people they represent. Rather than leave it to the professionals, it would be in your self-interest to understand the steps of the process. The more knowledgeable you are, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you own is an assurance that, if something bad happens to you, the firm that covers the policy will make good in one way or another in a timely fashion. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) decide who was at fault and that person's insurance pays out.
But since ascertaining who is financially accountable for services or repairs is often a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies in many cases opt to pay up front and assign blame later. They then need a path to recover the costs if, when all is said and done, they weren't responsible for the payout.
Can You Give an Example?
You rush into the doctor's office with a sliced-open finger. You hand the nurse your health insurance card and he records your plan information. You get stitched up and your insurance company is billed for the expenses. But on the following day, when you get to your place of employment – where the accident occurred – you are given workers compensation paperwork to fill out. Your employer's workers comp policy is actually responsible for the invoice, not your health insurance company. 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 method 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 self or property. But under subrogation law, your insurance company is extended 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.
How Does This Affect Me?
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 – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recover its expenses by raising your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after them efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full 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, based on the laws in most states.
In addition, if the total cost of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal defense attorney services Vancouver WA, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not the same. When comparing, it's worth looking up the reputations of competing companies to evaluate whether they pursue legitimate subrogation claims; if they resolve those claims fast; if they keep their clients advised as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you should keep looking.
