Subrogation is a term that's well-known among legal and insurance professionals but sometimes not by the policyholders who hire them. Even if you've never heard the word before, it would be in your self-interest to know the steps of how it works. The more you know, the more likely an insurance lawsuit will work out in your favor.
An insurance policy you own is an assurance that, if something bad occurs, the insurer of the policy will make restitutions in a timely manner. If you get hurt while working, your company's workers compensation 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 often a confusing affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance firms often decide to pay up front and figure out the blame afterward. They then need a mechanism to recoup the costs if, when there is time to look at all the facts, they weren't actually in charge of the expense.
Let's Look at an Example
You head to the Instacare with a deeply cut finger. You give the receptionist your medical insurance card and he records your coverage information. You get taken care of and your insurer gets a bill for the services. But the next day, when you get to work – where the accident happened – your boss hands you workers compensation forms to turn in. Your workers comp policy is in fact responsible for the bill, not your medical 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 way that an insurance company uses to claim payment 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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is given some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For a start, if you have a deductible, your insurer wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to get back its costs by raising your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after those cases aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total price of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as Auto accident attorney Lithia Springs GA, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not created equal. When shopping around, it's worth measuring the reputations of competing agencies to determine if they pursue winnable subrogation claims; if they do so quickly; if they keep their clients apprised as the case continues; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, on the other hand, an insurance agency has a record of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.