Subrogation is an idea that's understood in legal and insurance circles but sometimes not by the people they represent. If this term has come up when dealing with your insurance agent or a legal proceeding, it is in your self-interest to understand an overview of the process. The more knowledgeable you are, the better decisions you can make about your insurance company. An insurance policy you hold is an assurance that, if something bad happens to you, the company on the other end of the policy will make good in one way or another in a timely manner. If you get hurt while working, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up. But since figuring out who is financially accountable for services or repairs is typically a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame afterward. They then need a means to recover the costs if, once the situation is fully assessed, they weren't responsible for the expense. Can You Give an Example? Your electric outlet catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it pays for the repairs. However, the insurance investigator finds out that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him accountable for the damages. The house has already been repaired in the name of expediency, but your insurance agency is out $10,000. What does the agency do next? How Does Subrogation Work? This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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. Under ordinary circumstances, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended some of your rights 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. How Does This Affect Policyholders? For one thing, if you have a deductible, it wasn't just your insurer 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 insurer is unconcerned with pursuing subrogation even when it is entitled, it might choose to recover its expenses by increasing your premiums. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is acting both in its own interests and in yours. If all $10,000 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 accountable), you'll typically get half your deductible back, depending on your state laws. Furthermore, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as asbestos canada, successfully press a subrogation case, it will recover your losses as well as its own. All insurers are not created equal. When comparing, it's worth researching the reputations of competing companies to find out if they pursue legitimate subrogation claims; if they do so with some expediency; if they keep their policyholders apprised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, on the other hand, an insurance agency 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.