The Things Every Insurance Policy holder Ought to Know About Subrogation
Subrogation is a concept that's well-known in insurance and legal circles but rarely by the people they represent. Rather than leave it to the professionals, it is in your self-interest to know an overview of how it works. The more knowledgeable you are, the more likely relevant proceedings will work out in your favor.
Any insurance policy you have is a promise that, if something bad occurs, the company that insures the policy will make restitutions in one way or another in a timely fashion. If your house suffers fire damage, your property insurance agrees to compensate you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially accountable for services or repairs is sometimes a confusing affair – and time spent waiting sometimes adds to the damage to the victim – insurance firms often decide to pay up front and assign blame after the fact. They then need a path to regain the costs if, when all is said and done, they weren't actually in charge of the expense.
Let's Look at an Example
You are in an auto 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 and file a repair claim. Later police tell the insurance companies that the other driver was entirely at fault and her insurance policy should have paid for the repair of your auto. How does your insurance company get its money back?
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. 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 done to your self or property. But under subrogation law, your insurer 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 the Insured?
For starters, if your insurance policy stipulated a deductible, your insurer wasn't the only one that 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 insurer is lax about bringing subrogation cases to court, it might opt to get back its costs by upping your premiums. On the other hand, if it has a proficient legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. If all ten grand 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 to blame), you'll typically get $500 back, based on the laws in most states.
In addition, if the total expense 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 criminal attorney Hillsboro, OR, pursue subrogation and wins, it will recover your expenses as well as its own.
All insurance agencies are not the same. When comparing, it's worth researching the records of competing companies to evaluate if they pursue valid subrogation claims; if they resolve those claims fast; if they keep their customers updated as the case continues; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you should keep looking.