Subrogation and How It Affects PolicyholdersSubrogation is a concept that's understood among insurance and legal firms but sometimes not by the policyholders they represent. Even if you've never heard the word before it is in your benefit to comprehend the steps of the process. The more information you have about it the better decisions you can make with regard to your insurance company.

An insurance policy you hold is a promise that, if something bad happens to you, the business on the other end of the policy will make good in one way or another in a timely fashion. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was to blame and that party's insurance pays out.

But since figuring out who is financially accountable for services or repairs is typically a tedious, lengthy affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies in many cases decide to pay up front and assign blame later. They then need a way to get back the costs if, ultimately, they weren't actually responsible for the payout.

Can You Give an Example?

You go to the emergency room with a gouged finger. You hand the nurse your health insurance card and he takes down your coverage information. You get stitches and your insurance company gets a bill for the expenses. But the next afternoon, when you arrive at work – where the accident occurred – your boss hands you workers compensation forms to turn in. Your employer's workers comp policy is actually responsible for the invoice, 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 process that an insurance company uses to claim payment 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 self or property. But under subrogation law, your insurance company is given 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.

Why Does This Matter to Me?

For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to recover its expenses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get $500 back, depending on the laws in your state.

Furthermore, if the total expense 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 criminal law Hillsboro OR, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurance agencies are not the same. When comparing, it's worth measuring the reputations of competing agencies to determine whether they pursue winnable subrogation claims; if they resolve those claims quickly; if they keep their accountholders informed as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurance firm has a reputation of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you should keep looking.

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