Subrogation is a concept that's understood in insurance and legal circles but sometimes not by the policyholders who employ them. Even if it sounds complicated, it would be in your benefit to comprehend an overview of how it works. The more you know about it, the more likely relevant proceedings will work out favorably.
An insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make good without unreasonable delay. If you get an injury while working, for instance, your employer's workers compensation insurance picks up the tab 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 regularly a heavily involved affair – and time spent waiting often increases the damage to the victim – insurance firms usually opt to pay up front and assign blame after the fact. They then need a mechanism to regain the costs if, ultimately, they weren't in charge of the payout.
You rush into the emergency room with a gouged finger. You hand the nurse your health insurance card and she writes down your plan details. You get stitches and your insurer is billed for the medical care. But on the following afternoon, when you arrive at your place of employment – where the injury happened – you are given workers compensation paperwork to file. Your employer's workers comp policy is actually responsible for the payout, not your health insurance. It has a vested interest in getting that money back somehow.
How Subrogation Works
This is where subrogation comes in. It is the method 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 to your person or property. But under subrogation law, your insurer 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.
How Does This Affect Me?
For one thing, if you have a deductible, your insurer 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 the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recoup its losses by boosting your premiums and call it a day. On the other hand, if it has a competent legal team and pursues those cases efficiently, it is acting both in its own interests and in yours. If all $10,000 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 accountable), you'll typically get $500 back, based on the laws in most states.
In addition, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as criminal lawyer Portland, OR, pursue subrogation and succeeds, it will recover your costs in addition to its own.
All insurers are not the same. When comparing, it's worth weighing the records of competing firms to evaluate whether they pursue winnable subrogation claims; if they do so fast; if they keep their accountholders posted as the case proceeds; 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 firm has a reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.