Subrogation is an idea that's well-known in insurance and legal circles but often not by the policyholders who employ them. Even if you've never heard the word before, it would be to your advantage to comprehend the steps of how it works. The more you know about it, the more likely an insurance lawsuit will work out favorably.
Every insurance policy you hold is a promise that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was to blame and that person's insurance covers the damages.
But since figuring out who is financially responsible for services or repairs is usually a heavily involved affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies often opt to pay up front and assign blame later. They then need a method to recoup the costs if, when there is time to look at all the facts, they weren't actually in charge of the payout.
For Example
You arrive at the Instacare with a deeply cut finger. You give the receptionist your health insurance card and he takes down your policy information. You get taken care of and your insurance company gets a bill for the expenses. But on the following morning, when you arrive at work – where the accident happened – you are given workers compensation forms to fill out. Your company's workers comp policy is in fact responsible for the expenses, not your health insurance. The latter has an interest in recovering its money in some way.
How Subrogation Works
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 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 self or property. But under subrogation law, your insurance company is given 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.
How Does This Affect Me?
For a start, if your insurance policy stipulated a deductible, your insurance company 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recover its losses by boosting your premiums. On the other hand, if it has a knowledgeable legal team and goes after those cases efficiently, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get half your deductible back, based on the laws in most states.
Moreover, if the total expense 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 personal injury attorney Marietta, GA, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not created equal. When shopping around, it's worth scrutinizing the records of competing companies to find out whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients advised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your deductible back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.