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Any insurance policy you hold is a commitment that, if something bad happens to you, the company on the other end of the policy will make good in one way or another without unreasonable delay. If a blizzard damages your house, your property insurance agrees to repay you or facilitate the repairs, subject to state property damage laws.

But since ascertaining who is financially accountable for services or repairs is often a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies often opt to pay up front and assign blame later. They then need a way to recover the costs if, once the situation is fully assessed, they weren't actually in charge of the expense.

Let's Look at an Example

You are in a car accident. Another car collided with yours. Police are called, 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 car. How does your company get its funds back?

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurer is extended 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.

Why Do I Need to Know This?

For starters, if you have a deductible, your insurer wasn't the only one that 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 get back its costs by ballooning your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, based on the laws in most states.

Moreover, if the total cost 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 law defense lawyer Hillsboro OR, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurers are not the same. When shopping around, it's worth weighing the reputations of competing agencies to evaluate whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients posted as the case continues; and if they then process successfully won reimbursements quickly so that you can get your deductible 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 safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.