Subrogation is an idea that's understood in legal and insurance circles but sometimes not by the policyholders who hire them. Rather than leave it to the professionals, it would be in your benefit to comprehend an overview of how it works. The more you know about it, the more likely it is that relevant proceedings will work out in your favor.
An insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make restitutions in one way or another in a timely manner. If you get an injury while you're on the clock, your company's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is often a confusing affair – and delay often increases the damage to the policyholder – insurance firms often decide to pay up front and figure out the blame afterward. They then need a mechanism to get back the costs if, once the situation is fully assessed, they weren't responsible for the expense.
Can You Give an Example?
You rush into the doctor's office with a gouged finger. You hand the nurse your medical insurance card and she writes down your policy information. You get taken care of and your insurance company is billed for the medical care. But the next morning, when you clock in at your workplace – where the injury occurred – you are given workers compensation forms to fill out. Your company's workers comp policy is in fact responsible for the expenses, not your medical insurance policy. The latter has an interest in recovering its money in some way.
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. 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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurance company 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.
How Does This Affect Me?
For one thing, if you have a deductible, your insurance company 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 recoup its costs by increasing your premiums and call it a day. On the other hand, if it has a proficient legal team and goes after those cases aggressively, it is acting both in its own interests and in yours. If all of the money 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 responsible), you'll typically get $500 back, based on the laws in most states.
Furthermore, 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 workmans comp attorney Canton, ga, pursue subrogation and wins, it will recover your losses as well as its own.
All insurance companies are not created equal. When comparing, it's worth weighing the reputations of competing firms to determine whether they pursue winnable subrogation claims; if they do so without dragging their feet; if they keep their policyholders updated as the case goes on; and if they then process successfully won reimbursements right away 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 covering its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.