Subrogation is an idea that's understood among insurance and legal professionals but rarely by the people who employ them. Rather than leave it to the professionals, it is to your advantage to know the nuances of the process. The more knowledgeable you are about it, the better decisions you can make about your insurance policy.
An insurance policy you hold is an assurance that, if something bad occurs, the insurer of the policy will make good in one way or another in a timely manner. If your vehicle is hit, insurance adjusters (and the courts, when necessary) determine who was at fault and that person's insurance pays out.
But since ascertaining who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and time spent waiting often adds to the damage to the victim – insurance firms usually decide to pay up front and figure out the blame afterward. They then need a mechanism to recover the costs if, when all is said and done, they weren't actually responsible for the payout.
For Example
You are in a car accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was entirely at fault and her insurance policy should have paid for the repair of your auto. How does your insurance company get its money back?
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment 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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
For a start, if your insurance policy stipulated a deductible, your insurance company wasn't the only one that 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 unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its costs by raising your premiums. On the other hand, if it has a proficient legal team and pursues them aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get half your deductible back, depending on the laws in your state.
Furthermore, if the total price 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 car accident lawyer Lithia Springs GA, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not the same. When comparing, it's worth researching the reputations of competing companies to find out whether they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their accountholders advised as the case proceeds; 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 firm has a record of paying out claims that aren't its responsibility and then covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.