Subrogation is an idea that's well-known in insurance and legal circles but rarely by the people they represent. Rather than leave it to the professionals, it is to your advantage to comprehend an overview of the process. The more you know about it, the better decisions you can make about your insurance company.
Every insurance policy you own is a commitment that, if something bad occurs, the insurer of the policy will make restitutions in a timely manner. If you get injured 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 accountable for services or repairs is sometimes a time-consuming affair – and time spent waiting in some cases increases the damage to the policyholder – insurance firms often decide to pay up front and assign blame afterward. They then need a way to recoup the costs if, when all is said and done, they weren't actually responsible for the payout.
For Example
You head to the emergency room with a deeply cut finger. You hand the nurse your medical insurance card and he records your coverage information. You get stitched up and your insurance company gets a bill for the expenses. But on the following day, when you get to your workplace – 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 medical insurance policy. It has a vested interest in getting that money back somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Usually, only you can sue for damages to your self or property. But under subrogation law, your insurance company is extended some of your rights in exchange 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 your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to recoup its costs by ballooning your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues 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 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, based on the laws in most states.
Additionally, if the total loss of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as child custody attorney Lindon ut, pursue subrogation and succeeds, it will recover your expenses in addition to its own.
All insurers are not created equal. When shopping around, it's worth researching the records of competing agencies to find out if they pursue valid subrogation claims; if they do so fast; if they keep their clients informed as the case proceeds; 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 firm has a record of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, you'll feel the sting later.