Subrogation is a concept that's well-known in legal and insurance circles but sometimes not by the people who employ them. Even if you've never heard the word before, it is in your benefit to know the steps of the process. The more knowledgeable you are about it, the better decisions you can make about your insurance company.
Any insurance policy you have is a commitment that, if something bad occurs, the business on the other end of the policy will make restitutions without unreasonable delay. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) decide who was at fault and that party's insurance covers the damages.
But since figuring out who is financially responsible for services or repairs is usually a tedious, lengthy affair – and delay in some cases compounds the damage to the victim – insurance companies in many cases decide to pay up front and figure out the blame after the fact. They then need a way to get back the costs if, once the situation is fully assessed, they weren't responsible for the expense.
Let's Look at an Example
You are in a highway accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, 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 at fault and her insurance should have paid for the repair of your vehicle. How does your company get its money back?
How Does Subrogation Work?
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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is extended 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 one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its costs by boosting your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after those cases efficiently, it is doing you a favor as well as itself. If all is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total price of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as workers comp attorney Milton, ga, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance companies are not created equal. When comparing, it's worth examining the records of competing companies to find out whether they pursue legitimate subrogation claims; if they resolve those claims quickly; if they keep their customers posted 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, instead, an insurer has a record of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you'll feel the sting later.