Subrogation and How It Affects Your Insurance
Subrogation is a concept that's understood in legal and insurance circles but rarely by the policyholders they represent. Even if you've never heard the word before, it would be to your advantage to understand the steps of the process. The more you know about it, the better decisions you can make with regard to your insurance policy.
Any insurance policy you hold is an assurance 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 hurt while working, your company's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is often a confusing affair – and delay sometimes increases the damage to the policyholder – insurance companies often opt to pay up front and figure out the blame afterward. They then need a means to recoup the costs if, when there is time to look at all the facts, they weren't actually responsible for the expense.
Let's Look at an Example
You rush into the Instacare with a deeply cut finger. You give the receptionist your health insurance card and she records your coverage information. You get taken care of and your insurer gets an invoice for the medical care. But the next day, when you get to your workplace – where the accident happened – your boss hands you workers compensation forms to file. Your workers comp policy is actually responsible for the expenses, not your health insurance company. It has a vested interest in getting that money back somehow.
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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 person or property. But under subrogation law, your insurer is given 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 Me?
For starters, 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 – to the tune of $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its expenses by upping your premiums. On the other hand, if it has a knowledgeable legal team and goes after them enthusiastically, 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 one-half to blame), you'll typically get $500 back, based on the laws in most states.
In addition, if the total price 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 workers comp lawyer Austell GA, pursue subrogation and wins, it will recover your expenses as well as its own.
All insurers are not created equal. When shopping around, it's worth scrutinizing the reputations of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their customers updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurance firm has a record of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.