Subrogation is a concept that's well-known among legal and insurance firms but rarely by the policyholders who employ them. Rather than leave it to the professionals, it is in your benefit to understand the nuances of how it works. The more information you have about it, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you hold is a commitment that, if something bad happens to you, the company on the other end of the policy will make restitutions in a timely fashion. If you get an injury on the job, your company's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is sometimes a time-consuming affair – and time spent waiting in some cases adds to the damage to the victim – insurance firms in many cases opt to pay up front and assign blame after the fact. They then need a way to recoup the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.
Let's Look at an Example
You are in a car 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 police tell the insurance companies that the other driver was at fault and her insurance should have paid for the repair of your auto. How does your insurance company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the process 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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurance company 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.
Why Do I Need to Know This?
For one thing, if your insurance policy stipulated a deductible, your insurance company 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its losses by increasing your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get half your deductible back, depending on your state laws.
Additionally, if the total cost 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 auto accident injury attorney Rosedale MD, pursue subrogation and succeeds, it will recover your costs in addition to its own.
All insurance agencies are not the same. When comparing, it's worth researching the reputations of competing companies to find out if they pursue legitimate subrogation claims; if they do so fast; if they keep their policyholders informed as the case continues; and if they then process successfully won reimbursements immediately so that you can get your money 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 profitability by raising your premiums, you'll feel the sting later.