Subrogation is a concept that's understood among legal and insurance companies but often not by the people who employ them. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be to your advantage to comprehend the nuances of how it works. The more knowledgeable you are about it, the better decisions you can make about your insurance policy.
Every insurance policy you hold is a promise that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely manner. If you get an injury on the job, for instance, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is usually a confusing affair – and delay in some cases compounds the damage to the victim – insurance companies in many cases opt to pay up front and assign blame afterward. They then need a means to get back the costs if, in the end, they weren't in charge of the expense.
Can You Give an Example?
You are in a car accident. Another car crashed into yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was entirely at fault and her insurance should have paid for the repair of your vehicle. How does your company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim payment 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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurer is considered to have 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.
Why Do I Need to Know This?
For starters, 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 – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to get back its expenses by increasing your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and pursues them efficiently, it is acting both in its own interests and in yours. 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 at fault), you'll typically get half your deductible back, depending on the laws in your state.
Moreover, if the total loss 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 personal injury attorney Mableton GA, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurance agencies are not the same. When comparing, it's worth looking up the reputations of competing firms to determine if they pursue legitimate subrogation claims; if they do so with some expediency; if they keep their accountholders posted as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.