Subrogation is an idea that's understood among legal and insurance firms but sometimes not by the policyholders they represent. Even if it sounds complicated, it would be to your advantage to understand the steps of how it works. The more information you have about it, the more likely an insurance lawsuit will work out favorably.
Every insurance policy you have is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions without unreasonable delay. If you get hurt on the job, for example, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting often increases the damage to the victim – insurance companies often opt to pay up front and figure out the blame afterward. They then need a path to get back the costs if, when all the facts are laid out, they weren't actually in charge of the expense.
Let's Look at an Example
You rush into the emergency room with a deeply cut finger. You give the receptionist your medical insurance card and she takes down your coverage information. You get taken care of and your insurer gets a bill for the medical care. But the next afternoon, when you arrive at work – where the accident occurred – your boss hands you workers compensation forms to turn in. Your workers comp policy is actually responsible for the invoice, not your medical insurance policy. The latter has a right to recover its costs in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment 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. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurer 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.
Why Does This Matter to Me?
For starters, if you have a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by ballooning your premiums. On the other hand, if it knows which cases it is owed and pursues them efficiently, 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 50 percent responsible), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total price of an accident is more than 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 lawyer Hillsboro OR, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurers are not created equal. When comparing, it's worth weighing the reputations of competing agencies to evaluate if they pursue valid subrogation claims; if they resolve those claims quickly; if they keep their clients advised as the case goes on; 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, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.