Subrogation is an idea that's understood among insurance and legal companies but often not by the customers who employ them. Rather than leave it to the professionals, it is in your self-interest to understand the steps of how it works. The more information you have, the more likely relevant proceedings will work out favorably.
Any insurance policy you hold is a promise that, if something bad happens to you, the company on the other end of the policy will make good in one way or another without unreasonable delay. If you get hurt while working, your company's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is sometimes a heavily involved affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance firms usually decide to pay up front and assign blame later. They then need a path to regain the costs if, when all the facts are laid out, they weren't responsible for the payout.
You head to the Instacare with a sliced-open finger. You give the receptionist your health insurance card and she records your policy details. You get taken care of and your insurer gets a bill for the medical care. But the next afternoon, when you arrive at your place of employment – where the accident occurred – your boss hands you workers compensation paperwork to file. Your company'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 way 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. Normally, only you can sue for damages to your person or property. But under subrogation law, your insurer is extended some of your rights in exchange 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 Do I Need to Know This?
For starters, if your insurance policy stipulated a deductible, your insurer 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 – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recover its losses by increasing your premiums and call it a day. On the other hand, if it has a competent legal team and pursues them efficiently, it is doing you a favor as well as itself. 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 50 percent culpable), 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 could be in for a stiff bill. If your insurance company or its property damage lawyers, such as serious injury lawyers Glen Burnie MD, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not created equal. When comparing, it's worth looking at the records of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their clients posted as the case continues; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, instead, an insurance firm has a record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you'll feel the sting later.