Subrogation is a term that's well-known among insurance and legal firms but often not by the customers who employ them. Even if it sounds complicated, it would be in your benefit to comprehend an overview of the process. The more you know about it, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you hold is a promise that, if something bad happens to you, the firm that covers the policy will make good in one way or another in a timely fashion. If you get hurt while working, your company's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is sometimes a heavily involved affair – and delay in some cases adds to the damage to the victim – insurance companies often decide to pay up front and assign blame later. They then need a path to recoup the costs if, ultimately, they weren't responsible for the payout.
Can You Give an Example?
Your stove catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it pays out your claim in full. However, the assessor assigned to your case finds out that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him responsible for the damages. You already have your money, but your insurance firm is out $10,000. What does the firm do next?
How Subrogation Works
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 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 to your person 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 that was originally due to you, because it has covered the amount already.
How Does This Affect Individuals?
For starters, if you have a deductible, it wasn't just your insurance company that 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 choose to recover its losses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues 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 responsible), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total expense 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 criminal defense law Springville UT, 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 comparing the records of competing agencies to evaluate if they pursue valid subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders posted as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurance agency has a reputation of paying out claims that aren't its responsibility and then protecting its income by raising your premiums, you'll feel the sting later.