Subrogation is an idea that's well-known among insurance and legal professionals but often not by the policyholders they represent. Rather than leave it to the professionals, it would be to your advantage to understand the steps of the process. The more you know, the better decisions you can make with regard to your insurance policy.
Any insurance policy you hold is an assurance that, if something bad occurs, the insurer of the policy will make good without unreasonable delay. If your vehicle is rear-ended, insurance adjusters (and the courts, when necessary) determine who was at fault and that person's insurance covers the damages.
But since figuring out who is financially accountable for services or repairs is sometimes a heavily involved affair – and time spent waiting in some cases increases the damage to the victim – insurance firms in many cases decide to pay up front and figure out the blame afterward. They then need a means to get back the costs if, when all is said and done, they weren't actually in charge of the payout.
You arrive at the emergency room with a sliced-open finger. You hand the nurse your medical insurance card and she writes down your policy information. You get taken care of and your insurer gets an invoice for the medical care. But the next morning, when you get to work – where the injury occurred – you are given workers compensation forms to file. Your company's workers comp policy is actually responsible for the expenses, not your medical insurance policy. The latter has an interest in recovering 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 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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurer is given some of your rights for making good on the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Should I Care?
For one thing, if your insurance policy stipulated a deductible, your insurer 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recover its losses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them aggressively, 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 50 percent responsible), you'll typically get $500 back, based on the laws in most states.
In addition, if the total cost of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as employment lawyer university place wa, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurers are not the same. When shopping around, it's worth researching the records of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their customers informed as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you'll feel the sting later.