Subrogation is an idea that's understood among legal and insurance professionals but rarely by the customers who hire them. Rather than leave it to the professionals, it would be in your self-interest to comprehend an overview of how it works. The more knowledgeable you are about it, the better decisions you can make with regard to your insurance policy.
An insurance policy you have is an assurance that, if something bad happens to you, the company on the other end of the policy will make good in a timely manner. If you get hurt while you're on the clock, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is sometimes a tedious, lengthy affair – and delay sometimes increases the damage to the policyholder – insurance companies in many cases opt to pay up front and figure out the blame afterward. They then need a method to recover the costs if, when all is said and done, they weren't in charge of the expense.
Can You Give an Example?
You go to the hospital with a gouged finger. You give the receptionist your health insurance card and he takes down your plan information. You get stitches and your insurance company is billed for the medical care. But the next afternoon, when you clock in at work – where the accident occurred – you are given workers compensation forms to file. Your company's workers comp policy is in fact responsible for the bill, not your health insurance. It has a vested interest in getting that money back somehow.
How Does Subrogation Work?
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 insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Ordinarily, 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 originally due to you, because it has covered the amount already.
How Does This Affect the Insured?
For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after them enthusiastically, it is acting both in its own interests and in yours. If all is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get $500 back, depending on your state laws.
Furthermore, if the total price 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 law defense attorney Portland OR, pursue subrogation and succeeds, it will recover your costs as well as its own.
All insurance agencies are not created equal. When comparing, it's worth measuring the records of competing agencies to find out if they pursue valid subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their policyholders apprised as the case proceeds; 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 insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you should keep looking.
