The Things You Need to Know About Subrogation
Subrogation is a term that's well-known among insurance and legal firms but rarely by the customers who hire them. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be to your advantage to know the steps of how it works. The more knowledgeable you are, the more likely it is that an insurance lawsuit will work out favorably.
Any insurance policy you own is an assurance that, if something bad occurs, the business that covers the policy will make good in one way or another in a timely manner. If you get an injury on the job, for example, your employer's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially accountable for services or repairs is typically a tedious, lengthy affair – and time spent waiting sometimes increases the damage to the victim – insurance companies often decide to pay up front and assign blame afterward. They then need a path to get back 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 go to the hospital with a gouged finger. You hand the nurse your medical insurance card and she takes down your coverage details. You get stitches and your insurance company is billed for the tab. But on the following day, when you clock in at work – where the injury happened – you are given workers compensation paperwork to turn in. Your company's workers comp policy is in fact responsible for the costs, not your medical insurance policy. The latter has an interest in recovering its costs in some way.
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. Usually, 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 having taken care of 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 a start, if you have a deductible, it wasn't just your insurance company that 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 timid on any subrogation case it might not win, it might opt to get back its expenses by raising your premiums. On the other hand, if it has a proficient legal team and goes after those cases aggressively, it is doing you a favor as well as itself. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half to blame), you'll typically get half your deductible back, depending on the laws in your state.
Additionally, if the total cost of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal defense lawyer Hillsboro OR, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance agencies are not created equal. When comparing, it's worth looking at the reputations of competing companies to determine whether they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their customers apprised 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 insurer has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.