Subrogation is a concept that's understood among legal and insurance firms but rarely by the policyholders who employ them. Rather than leave it to the professionals, it would be in your self-interest to understand an overview of the process. The more information you have about it, the better decisions you can make about your insurance policy.
Any insurance policy you hold is a promise that, if something bad happens to you, the insurer of the policy will make restitutions in a timely fashion. If a storm damages your property, for instance, your property insurance agrees to remunerate you or facilitate the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is regularly a heavily involved affair – and delay sometimes increases the damage to the policyholder – insurance companies often opt to pay up front and figure out the blame later. They then need a method to recover the costs if, when there is time to look at all the facts, they weren't responsible for the expense.
For Example
You go to the Instacare with a sliced-open finger. You give the nurse your health insurance card and she takes down your policy details. You get stitched up and your insurance company gets an invoice for the expenses. But on the following afternoon, when you get to work – where the accident occurred – you are given workers compensation forms to file. Your workers comp policy is in fact responsible for the hospital trip, not your health insurance policy. It has a vested interest in getting that money back in some way.
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 companies 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 given 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 Individuals?
For a start, 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 choose to recoup its costs by upping your premiums. On the other hand, if it has a proficient legal team and pursues them enthusiastically, 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 one-half at fault), you'll typically get half your deductible back, depending on the laws in your state.
Furthermore, if the total expense of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as Personal injury attorney near me Tacoma WA, successfully press a subrogation case, it will recover your losses as well as its own.
All insurers are not created equal. When comparing, it's worth examining the records of competing agencies to evaluate whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients advised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, instead, an insurance agency has a record of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.