Subrogation is a term that's well-known among insurance and legal companies but often not by the customers who hire them. Rather than leave it to the professionals, it would be in your self-interest to comprehend the nuances of the process. The more information you have about it, the better decisions you can make about your insurance company.
Any insurance policy you hold is a promise that, if something bad occurs, the business on the other end of the policy will make good in one way or another in a timely manner. If you get injured while working, your company's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is sometimes a confusing affair – and time spent waiting often adds to the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame after the fact. They then need a mechanism to recoup the costs if, ultimately, they weren't responsible for the expense.
Let's Look at an Example
You are in a highway accident. Another car ran into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was to blame and his insurance should have paid for the repair of your auto. How does your company get its money back?
How Does Subrogation Work?
This is where subrogation comes in. It is the method 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 self 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 that was originally due to you, because it has covered the amount already.
How Does This Affect Individuals?
For one thing, 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 have a stake in the outcome as well – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its expenses by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases aggressively, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full 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, depending on your state laws.
Moreover, if the total expense 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 best lawyer 23294, pursue subrogation and wins, it will recover your losses as well as its own.
All insurance agencies are not the same. When comparing, it's worth looking at the records of competing agencies to find out whether they pursue valid subrogation claims; if they do so quickly; if they keep their customers updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurance company has a record of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you should keep looking.