Subrogation is a term that's well-known among legal and insurance firms but sometimes not by the customers who hire them. Even if it sounds complicated, it is to your advantage to know the nuances of the process. The more knowledgeable you are about it, the more likely it is that relevant proceedings will work out favorably.
Any insurance policy you own is a promise that, if something bad happens to you, the firm on the other end of the policy will make good in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was at fault and that party's insurance covers the damages.
But since figuring out who is financially accountable for services or repairs is regularly a confusing affair – and delay in some cases adds to the damage to the victim – insurance firms often opt to pay up front and figure out the blame afterward. They then need a mechanism to get back the costs if, once the situation is fully assessed, they weren't actually in charge of the expense.
Can You Give an Example?
You rush into the doctor's office with a deeply cut finger. You hand the receptionist your medical insurance card and he records your plan details. You get stitches and your insurance company gets an invoice for the tab. But on the following afternoon, when you arrive at your workplace – where the accident happened – your boss hands you workers compensation paperwork to fill out. Your company's workers comp policy is actually responsible for the costs, not your medical insurance. The latter has a right to recover its money in some way.
How Subrogation Works
This is where subrogation comes in. It is the process 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. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is considered to have some of your rights for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
How Does This Affect the Insured?
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 have a stake in the outcome as well – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to get back its expenses by raising your premiums. On the other hand, if it has a competent legal team and goes after those cases aggressively, it is doing you a favor as well as itself. If all is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get $500 back, based on the laws in most states.
In addition, if the total loss 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 workers compensation Milton, ga, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurers are not the same. When comparing, it's worth comparing the reputations of competing agencies to find out if they pursue valid subrogation claims; if they do so quickly; if they keep their accountholders posted as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding 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 bottom line by raising your premiums, you should keep looking.