Subrogation is a concept that's understood among legal and insurance professionals but often not by the customers who employ them. Even if you've never heard the word before, it would be to your advantage to know the steps of the process. The more knowledgeable you are about it, the more likely it is that relevant proceedings will work out in your favor.

An insurance policy you own is a commitment that, if something bad happens to you, the firm that covers the policy will make restitutions in a timely fashion. If you get an injury while you're on the clock, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.

But since determining who is financially accountable for services or repairs is often a time-consuming affair – and time spent waiting often adds to the damage to the policyholder – insurance firms often opt 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 expense.

Can You Give an Example?

You are in a highway accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was to blame and her insurance policy should have paid for the repair of your vehicle. How does your company get its funds back?

How Does Subrogation Work?

This is where subrogation comes in. It is the method that an insurance company uses to claim payment 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. Usually, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for having taken care of the damages. It can go after the money 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, it wasn't just your insurance company that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – 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 raising your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues those cases enthusiastically, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get half your deductible back, based on the laws in most states.

Additionally, if the total loss 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 attorney Sandy Ut, pursue subrogation and wins, it will recover your losses in addition to its own.

All insurance companies are not created equal. When shopping around, it's worth looking at the records of competing firms to determine whether they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their account holders apprised as the case continues; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, on the other hand, an insurance firm has a reputation of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, you should keep looking.