Subrogation is an idea that's well-known among legal and insurance professionals but rarely by the customers who employ them. Rather than leave it to the professionals, it is in your benefit to know the steps of the process. The more you know about it, the better decisions you can make about your insurance policy.
Any insurance policy you hold is a commitment that, if something bad occurs, the insurer of the policy will make good in a timely manner. If you get an injury while you're on the clock, for example, your company's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is regularly a confusing affair – and delay sometimes increases the damage to the victim – insurance firms usually opt to pay up front and figure out the blame after the fact. They then need a path to get back the costs if, when all is said and done, they weren't in charge of the expense.
Can You Give an Example?
You arrive at the Instacare with a gouged finger. You give the nurse your medical insurance card and she records your policy details. You get taken care of and your insurer gets a bill for the tab. But on the following morning, when you clock in at your workplace – where the accident happened – you are given workers compensation paperwork to fill out. Your workers comp policy is actually responsible for the hospital visit, not your medical insurance policy. The latter has a right to recover its costs somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 insurer is considered to have some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For a start, if you have a deductible, it wasn't just your insurer who 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 insurer is timid on any subrogation case it might not win, it might opt to get back its losses by raising 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 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 one-half to blame), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as personal injury attorney reston, va, pursue subrogation and wins, it will recover your expenses in addition to its own.
All insurers are not created equal. When shopping around, it's worth scrutinizing the reputations of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their accountholders posted as the case proceeds; 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, on the other hand, an insurer has a record of honoring claims that aren't its responsibility and then covering its profit margin by raising your premiums, you'll feel the sting later.