Subrogation is a term that's understood in insurance and legal circles but sometimes not by the people who employ them. Even if you've never heard the word before, it is in your self-interest to comprehend an overview of the process. The more you know about it, the better decisions you can make with regard to your insurance company.
An insurance policy you own is an assurance that, if something bad occurs, the business on the other end of the policy will make restitutions in a timely manner. If you get an injury while you're on the clock, your employer's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is often a tedious, lengthy affair – and time spent waiting often increases the damage to the victim – insurance companies often opt to pay up front and assign blame later. They then need a mechanism to get back the costs if, ultimately, they weren't actually responsible for the expense.
Can You Give an Example?
You are in an auto accident. Another car collided with yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was to blame and his insurance policy should have paid for the repair of your car. How does your company get its money back?
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 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 self or property. But under subrogation law, your insurer is given 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.
Why Should I Care?
For one thing, if you have 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 be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to get back its costs by boosting your premiums and call it a day. 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 $10,000 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 half your deductible back, depending on your state laws.
Additionally, if the total price of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as child custody lawyer boulder city Nv, pursue subrogation and succeeds, 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 reputations of competing firms to evaluate if they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their customers posted as the case continues; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you'll feel the sting later.