Subrogation is an idea that's well-known among legal and insurance companies but often not by the policyholders they represent. Even if it sounds complicated, it is to your advantage to comprehend an overview of how it works. The more information you have about it, the more likely relevant proceedings will work out in your favor.
Any insurance policy you have is a commitment that, if something bad occurs, the business on the other end of the policy will make restitutions in one way or another without unreasonable delay. If you get hurt while working, your employer's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is sometimes a confusing affair – and delay in some cases adds to the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame later. They then need a method to recoup the costs if, once the situation is fully assessed, they weren't responsible for the payout.
Can You Give an Example?
You head to the Instacare with a sliced-open finger. You hand the receptionist your medical insurance card and she records your coverage information. You get stitches and your insurer gets a bill for the medical care. But the next afternoon, when you get to work – where the accident happened – you are given workers compensation forms to turn in. Your employer's workers comp policy is actually responsible for the invoice, not your medical insurance. It has a vested interest in getting that money back in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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 done to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for having taken care of 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 Me?
For starters, 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 lost some money too – to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recoup its expenses by ballooning your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and pursues them efficiently, it is acting both in its own interests and in yours. If all ten grand 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 to blame), you'll typically get $500 back, based on the laws in most states.
Moreover, 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 patent infringement 77092, pursue subrogation and wins, it will recover your expenses in addition to its own.
All insurers are not the same. When comparing, it's worth looking up the reputations of competing companies to find out if they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their clients updated as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, you should keep looking.