Subrogation is a concept that's well-known in insurance and legal circles but rarely by the people they represent. Rather than leave it to the professionals, it is to your advantage to comprehend an overview of the process. The more knowledgeable you are, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you own is a promise that, if something bad happens to you, the company that insures the policy will make good in a timely manner. If your property burns down, for example, your property insurance agrees to remunerate you or enable the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is regularly a tedious, lengthy affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame after the fact. They then need a path to recover the costs if, once the situation is fully assessed, they weren't actually responsible for the expense.
Can You Give an Example?
You are in a car 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 and file a repair claim. Later police tell the insurance companies that the other driver was entirely to blame and her insurance should have paid for the repair of your car. How does your insurance company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement 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. 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 a start, if you have a deductible, your insurer wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose 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 enthusiastically, it is acting both in its own interests and in yours. If all ten grand 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 at fault), you'll typically get half your deductible back, based on the laws in most states.
In addition, 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 law defense attorney Hillsboro OR, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not the same. When comparing, it's worth scrutinizing the records of competing agencies to find out if they pursue legitimate subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders apprised 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, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you should keep looking.