Subrogation is a term that's well-known in insurance and legal circles but rarely by the people who hire them. Rather than leave it to the professionals, it would be to your advantage to understand the steps of the process. The more you know, the more likely an insurance lawsuit will work out favorably.
Every insurance policy you own is a commitment that, if something bad happens to you, the company that covers the policy will make good in one way or another without unreasonable delay. If your home is robbed, for instance, your property insurance agrees to remunerate you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting sometimes increases the damage to the policyholder – insurance firms in many cases opt to pay up front and figure out the blame afterward. They then need a path to recoup the costs if, ultimately, they weren't responsible for the expense.
Can You Give an Example?
You go to the doctor's office with a gouged finger. You hand the receptionist your health insurance card and he takes down your policy details. You get stitched up and your insurer is billed for the medical care. But the next day, when you clock in at your place of employment – where the injury happened – you are given workers compensation paperwork to file. Your workers comp policy is in fact responsible for the payout, not your health insurance. The latter has an interest in recovering its money somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Usually, only you can sue for damages done to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange 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 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 insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues 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 one-half accountable), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as workmans comp Milton, ga, successfully press a subrogation case, it will recover your costs as well as its own.
All insurers are not the same. When shopping around, it's worth researching the records of competing firms to evaluate whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their accountholders apprised as the case continues; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, on the other hand, an insurance firm has a reputation of honoring claims that aren't its responsibility and then covering its bottom line by raising your premiums, you should keep looking.