Subrogation is a term that's understood in legal and insurance circles but often not by the people they represent. Rather than leave it to the professionals, it would be in your self-interest to understand the steps of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out favorably.
Every insurance policy you hold is a commitment that, if something bad happens to you, the firm on the other end of the policy will make good in one way or another in a timely manner. If you get an injury at work, for instance, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is usually a tedious, lengthy affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance firms often decide to pay up front and assign blame later. They then need a way to get back the costs if, ultimately, they weren't responsible for the expense.
Can You Give an Example?
You are in a vehicle accident. Another car collided with yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was entirely to blame and his insurance policy should have paid for the repair of your vehicle. How does your insurance company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some companies 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 done to your person or property. But under subrogation law, your insurer is considered to have some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
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 lost some money too – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to recover its costs by upping your premiums. On the other hand, if it has a knowledgeable 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 $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get half your deductible back, based on the laws in most states.
Additionally, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as criminal defense lawyer Portland OR, successfully press a subrogation case, it will recover your losses as well as its own.
All insurers are not created equal. When comparing, it's worth weighing the records of competing agencies to evaluate whether they pursue valid subrogation claims; if they do so with some expediency; if they keep their clients updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.