The Things Every Policy holder Ought to Know About Subrogation
Subrogation is an idea 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 is in your self-interest to know the nuances of how it works. The more information you have about it, the better decisions you can make with regard to your insurance company.
Every insurance policy you own is a commitment that, if something bad occurs, the company that insures the policy will make restitutions in one way or another without unreasonable delay. If you get an injury while working, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially accountable for services or repairs is regularly a heavily involved affair – and time spent waiting often increases the damage to the victim – insurance companies often opt to pay up front and figure out the blame after the fact. They then need a means to regain the costs if, once the situation is fully assessed, they weren't actually in charge of the expense.
Let's Look at an Example
You go to the emergency room with a deeply cut finger. You hand the nurse your medical insurance card and he writes down your policy information. You get stitches and your insurer gets a bill for the tab. But the next day, when you clock in at work – where the injury happened – your boss hands you workers compensation forms to fill out. Your company's workers comp policy is in fact responsible for the invoice, not your medical 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 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. Ordinarily, only you can sue for damages to your self or property. But under subrogation law, your insurer is extended some of your rights 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.
How Does This Affect Policyholders?
For one thing, if your insurance policy stipulated a deductible, your insurer wasn't the only one that 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 recoup its losses by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half to blame), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total cost of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as immigration lawyer near me Sandy Ut, pursue subrogation and succeeds, it will recover your expenses in addition to its own.
All insurers are not created equal. When shopping around, it's worth looking up the records of competing companies to determine whether they pursue valid subrogation claims; if they do so without delay; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you'll feel the sting later.