Subrogation is an idea that's well-known among legal and insurance firms but rarely by the customers who employ them. Rather than leave it to the professionals, it would be in your self-interest to understand the steps of the process. The more information you have, the more likely relevant proceedings will work out favorably.
An insurance policy you hold is a promise that, if something bad happens to you, the company that covers the policy will make restitutions in one way or another without unreasonable delay. If a storm damages your property, your property insurance steps in to remunerate you or facilitate the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is regularly a heavily involved affair – and delay sometimes adds to the damage to the policyholder – insurance companies often decide to pay up front and assign blame afterward. They then need a method to recoup the costs if, when all is said and done, they weren't in charge of the expense.
Let's Look at an Example
You go to the Instacare with a deeply cut finger. You give the receptionist your medical insurance card and she writes down your coverage details. You get stitched up and your insurer gets a bill for the services. But the next afternoon, when you clock in at work – where the accident occurred – you are given workers compensation paperwork to turn in. Your employer's workers comp policy is actually responsible for the bill, not your medical insurance policy. 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 process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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 to your person or property. But under subrogation law, your insurer is given some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer 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 lax about bringing subrogation cases to court, it might choose to get back its losses by raising your premiums. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is doing you a favor as well as itself. If all of the money 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 at fault), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total cost 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 motorcycle accident lawyer greater atlanta area, pursue subrogation and succeeds, it will recover your losses in addition to its own.
All insurance agencies are not created equal. When shopping around, it's worth measuring the records of competing firms to determine whether they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their policyholders posted as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, instead, an insurance agency has a reputation of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you should keep looking.