Subrogation and How It Affects You
Subrogation is an idea that's understood among insurance and legal professionals but often not by the people they represent. Even if you've never heard the word before, it is in your benefit to know the nuances of the process. The more knowledgeable you are, the better decisions you can make with regard to your insurance policy.
An insurance policy you own is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another without unreasonable delay. If you get hurt while working, your employer's workers compensation 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 usually a heavily involved affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies in many cases opt to pay up front and assign blame later. They then need a way to regain the costs if, when all the facts are laid out, they weren't actually responsible for the expense.
Let's Look at an Example
You rush into the doctor's office with a sliced-open finger. You give the nurse your medical insurance card and she takes down your plan details. You get stitches and your insurer is billed for the tab. But on the following day, when you clock in at your place of employment – where the injury occurred – your boss hands you workers compensation paperwork to fill out. Your company's workers comp policy is actually responsible for the invoice, not your medical insurance. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the way 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. Normally, only you can sue for damages to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for making good on 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 a start, if your insurance policy stipulated a deductible, it wasn't just your insurer 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 opt to recoup its losses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them efficiently, it is doing you a favor as well as itself. 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 half your deductible back, depending on the laws in your state.
Additionally, if the total loss 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 attorneys that specialize in auto accidents Mableton GA, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurance companies are not the same. When comparing, it's worth measuring the records of competing companies to evaluate whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their clients posted as the case continues; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurance agency has a record of honoring claims that aren't its responsibility and then protecting its income by raising your premiums, you'll feel the sting later.