Subrogation is a concept that's well-known in legal and insurance circles but rarely by the customers who employ them. Even if it sounds complicated, it is in your self-interest to understand the steps of the process. The more you know about it, the more likely it is that relevant proceedings will work out in your favor.

An insurance policy you have is an assurance that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If you get injured on the job, your employer's workers compensation insurance pays out 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 tedious, lengthy affair – and delay sometimes compounds the damage to the victim – insurance companies in many cases opt to pay up front and assign blame after the fact. They then need a way to get back the costs if, when all is said and done, they weren't actually responsible for the payout.

Let's Look at an Example

You rush into the hospital with a deeply cut finger. You hand the receptionist your medical insurance card and she takes down your policy details. You get stitches and your insurer gets an invoice for the expenses. But on the following afternoon, when you get to your workplace – where the injury happened – you are given workers compensation paperwork to fill out. Your workers comp policy is in fact responsible for the costs, not your medical insurance company. It has a vested interest in getting that money back somehow.

How Subrogation Works

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. Under ordinary circumstances, only you can sue for damages done 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 originally due to you, because it has covered the amount already.

How Does This Affect Individuals?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurer who 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 insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its expenses by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases efficiently, 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 accountable), you'll typically get $500 back, depending on the laws in your state.

Moreover, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as custody attorney Lindon ut, pursue subrogation and succeeds, it will recover your losses as well as its own.

All insurance companies are not the same. When comparing, it's worth scrutinizing the records of competing agencies to determine if they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their account holders apprised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then protecting its profitability by raising your premiums, you should keep looking.