Subrogation and How It Affects Your Insurance
Subrogation is an idea that's understood in insurance and legal circles but often not by the policyholders who employ them. Rather than leave it to the professionals, it is to your advantage to understand an overview of the process. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.
An insurance policy you own is a commitment that, if something bad happens to you, the company that covers the policy will make good in one way or another in a timely fashion. If you get injured 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 accountable for services or repairs is usually a confusing affair a€" and delay sometimes increases the damage to the victim a€" insurance firms often decide to pay up front and figure out the blame later. They then need a mechanism to regain the costs if, when all is said and done, they weren't responsible for the payout.
For Example
You rush into the Instacare with a deeply cut finger. You hand the nurse your medical insurance card and she writes down your policy details. You get stitched up and your insurance company gets an invoice for the medical care. But the next morning, when you arrive at your place of employment a€" where the injury happened a€" your boss hands you workers compensation forms to turn in. Your company's workers comp policy is in fact responsible for the payout, not your medical insurance company. The latter has an interest in recovering its costs in some way.
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 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 done to your self or property. But under subrogation law, your insurance company is extended 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.
How Does This Affect Policyholders?
For one thing, if you have a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well a€" to the tune of $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by ballooning your premiums. On the other hand, if it knows which cases it is owed 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 thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.
Moreover, if the total price 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 divorce lawyer orem ut, pursue subrogation and succeeds, it will recover your costs in addition to its own.
All insurance agencies are not the same. When shopping around, it's worth contrasting the records of competing firms to evaluate if they pursue legitimate subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders informed as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, you'll feel the sting later.