The Things You Need to Know About Subrogation
Subrogation is an idea that's well-known in legal and insurance circles but rarely by the customers who hire them. Even if you've never heard the word before, it is in your self-interest to understand the nuances of how it works. The more information you have, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you own is a promise that, if something bad happens to you, the company that covers the policy will make restitutions without unreasonable delay. If a blizzard damages your house, your property insurance steps in to repay you or enable the repairs, subject to state property damage laws.
But since ascertaining who is financially accountable for services or repairs is usually a confusing affair – and delay in some cases increases the damage to the policyholder – insurance firms often opt to pay up front and figure out the blame after the fact. They then need a means to get back the costs if, ultimately, they weren't responsible for the payout.
Let's Look at an Example
You head to the Instacare with a sliced-open finger. You give the nurse your health insurance card and he takes down your policy details. You get taken care of and your insurer gets an invoice for the medical care. 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 file. Your workers comp policy is in fact responsible for the hospital visit, not your health insurance policy. It has a vested interest in getting that money back somehow.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Ordinarily, only you can sue for damages done to your self 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 originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For a start, if you have a deductible, it wasn't just your insurer 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its losses by increasing your premiums. On the other hand, if it has a capable legal team and goes after those cases enthusiastically, 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 your state laws.
In addition, if the total cost of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as personal injury attorney Powder Springs, GA, successfully press a subrogation case, it will recover your costs in addition to its own.
All insurance agencies are not created equal. When comparing, it's worth looking up the records of competing firms to find out whether they pursue valid subrogation claims; if they do so fast; if they keep their accountholders updated as the case continues; 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 honoring claims that aren't its responsibility and then covering its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.