Subrogation is a concept that's well-known in insurance and legal circles but often not by the policyholders they represent. Rather than leave it to the professionals, it would be in your benefit to comprehend an overview of the process. The more you know, the better decisions you can make with regard to your insurance company.
Every insurance policy you own is an assurance that, if something bad happens to you, the business that covers the policy will make restitutions in one way or another without unreasonable delay. If your property is broken into, your property insurance agrees to remunerate you or enable the repairs, subject to state property damage laws.
But since ascertaining who is financially responsible for services or repairs is often a time-consuming affair – and delay in some cases compounds the damage to the victim – insurance firms often opt to pay up front and assign blame after the fact. They then need a mechanism to recoup the costs if, ultimately, they weren't in charge of the expense.
You rush into the emergency room with a sliced-open finger. You hand the receptionist your medical insurance card and he records your plan information. You get taken care of and your insurance company gets a bill for the services. But on the following day, when you get to work – where the injury happened – your boss hands you workers compensation forms to file. Your workers comp policy is in fact responsible for the invoice, not your medical insurance. 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 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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is given some of your rights 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 Does This Matter to Me?
For one thing, if you have 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 – to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its costs by boosting your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them efficiently, it is acting both in its own interests and in yours. If all 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 to blame), you'll typically get half your deductible back, depending on the laws in your state.
Moreover, 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 workers compensation Austell GA, pursue subrogation and succeeds, it will recover your expenses as well as its own.
All insurers are not the same. When comparing, it's worth examining the records of competing firms to find out whether they pursue legitimate subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, instead, an insurance company has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.