9/6/2018AdminEmployment Law
Subrogation is a concept that's well-known among insurance and legal professionals but often not by the people who employ them. Even if you've never heard the word before, it is in your benefit to know an overview of how it works. The more you know about it, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another in a timely fashion. If you get injured at work, for instance, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is usually a time-consuming affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance companies usually decide to pay up front and assign blame afterward. They then need a mechanism to get back the costs if, ultimately, they weren't actually responsible for the payout.
Can You Give an Example?
Your stove catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it takes care of the repair expenses. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him responsible for the loss. The home has already been fixed up in the name of expediency, but your insurance agency is out all that money. What does the agency do next?
How Subrogation Works
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 insurance firms 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 person or property. But under subrogation law, your insurer is extended 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.
How Does This Affect Me?
For one thing, if you have a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by boosting your premiums. On the other hand, if it has a competent legal team and goes after those cases efficiently, it is acting both in its own interests and in yours. If all 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 responsible), you'll typically get $500 back, based on the laws in most states.
Additionally, 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 employment lawyer tacoma wa, successfully press a subrogation case, it will recover your losses as well as its own.
All insurance companies are not the same. When shopping around, it's worth researching the records of competing companies to evaluate if they pursue valid subrogation claims; if they resolve those claims without dragging their feet; if they keep their policyholders posted as the case proceeds; 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, on the other hand, an insurance agency has a reputation of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.