Subrogation is an idea that's well-known in legal and insurance circles but sometimes not by the policyholders who employ them. Rather than leave it to the professionals, it would be to your advantage to comprehend the steps of the process. The more you know about it, the better decisions you can make about your insurance company.
An insurance policy you own is a commitment that, if something bad happens to you, the company on the other end of the policy will make restitutions in one way or another in a timely fashion. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) decide who was at fault and that party's insurance pays out.
But since ascertaining who is financially accountable for services or repairs is usually a confusing affair a€" and time spent waiting sometimes increases the damage to the victim a€" insurance companies usually opt to pay up front and figure out the blame later. They then need a method to recover the costs if, when all is said and done, they weren't in charge of the expense.
For Example
You arrive at the Instacare with a sliced-open finger. You give the receptionist your medical insurance card and he writes down your plan information. You get stitched up and your insurer gets an invoice for the medical care. But the next day, when you arrive at your place of employment a€" where the injury occurred a€" you are given workers compensation forms to file. Your company's workers comp policy is in fact responsible for the costs, not your medical insurance. The latter has an interest in recovering its costs somehow.
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. Usually, only you can sue for damages to your self or property. But under subrogation law, your insurer is considered to have 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 the Insured?
For starters, if you have 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 a€" namely, $1,000. If your insurance company is timid on any subrogation case it might not win, 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 those cases aggressively, it is doing you a favor as well as itself. If all is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get $500 back, depending on the laws in your state.
Moreover, if the total expense 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 Divorce law pleasant grove ut, successfully press a subrogation case, it will recover your costs as well as its own.
All insurers are not the same. When comparing, it's worth scrutinizing the reputations of competing firms to determine if they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their customers apprised as the case continues; 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 insurance company has a record of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.