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Subrogation is an idea that's well-known in insurance and legal circles but sometimes not by the people who hire them. Rather than leave it to the professionals, it is in your self-interest to comprehend the steps of how it works. The more information you have, the better decisions you can make with regard to your insurance policy.

Every insurance policy you own is a promise that, if something bad happens to you, the company that insures the policy will make restitutions without unreasonable delay. If your house is robbed, for example, your property insurance steps in to repay you or facilitate the repairs, subject to state property damage laws.

But since determining who is financially responsible for services or repairs is sometimes a confusing affair – and delay in some cases increases the damage to the victim – insurance companies usually decide to pay up front and assign blame later. They then need a mechanism to regain the costs if, once the situation is fully assessed, they weren't in charge of the payout.

Can You Give an Example?

You go to the hospital with a deeply cut finger. You hand the receptionist your health insurance card and she writes down your coverage details. You get stitches and your insurer gets a bill for the services. But the next morning, when you clock in at your place of employment – where the accident occurred – your boss hands you workers compensation forms to turn in. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance company. It has a vested interest in getting that money back in some way.

How Does Subrogation Work?

This is where subrogation comes in. It is the process 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. Usually, only you can sue for damages done to your self or property. But under subrogation law, your insurer is considered to have some of your rights for making good on 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 starters, if your insurance policy stipulated a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recoup its costs 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 aggressively, it is doing you a favor as well as itself. 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 at fault), you'll typically get half your deductible back, depending on your state laws.

Additionally, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as Auto accident lawyer Powder Springs GA, successfully press a subrogation case, it will recover your expenses in addition to its own.

All insurance agencies are not created equal. When comparing, it's worth researching the reputations of competing firms to determine 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 immediately so that you can get your money back and move on with your life. If, instead, an insurance company has a record of honoring claims that aren't its responsibility and then protecting its income by raising your premiums, you should keep looking.