Subrogation is an idea that's well-known in legal and insurance circles but sometimes not by the people who employ them. Even if it sounds complicated, it is to your advantage to understand the nuances of how it works. The more knowledgeable you are about it, the better decisions you can make about your insurance company.
Any insurance policy you own is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions without unreasonable delay. If you get an injury on the job, your employer's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is sometimes a tedious, lengthy affair – and time spent waiting sometimes adds to the damage to the policyholder – insurance firms in many cases decide to pay up front and assign blame after the fact. They then need a path to get back the costs if, ultimately, they weren't actually in charge of the payout.
Can You Give an Example?
You head to the doctor's office with a gouged finger. You hand the receptionist your health insurance card and she records your policy information. You get stitched up and your insurance company gets an invoice for the medical care. But on the following day, when you arrive at your workplace – where the injury occurred – your boss hands you workers compensation forms to turn in. Your employer's workers comp policy is in fact responsible for the expenses, not your health insurance company. The latter has a right to recover its money somehow.
How Subrogation Works
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 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 to your person or property. But under subrogation law, your insurance company is given some of your rights in exchange 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 Should I Care?
For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 choose to recover its expenses by increasing your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full thousand-dollar 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, based on the laws in most states.
Additionally, if the total cost of an accident is more than 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 Portland OR, successfully press a subrogation case, it will recover your losses as well as its own.
All insurers are not the same. When shopping around, it's worth looking at the reputations of competing agencies to find out if they pursue winnable subrogation claims; if they resolve those claims with some expediency; if they keep their policyholders posted as the case continues; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, instead, an insurance company has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.