Every insurance policy you own is an assurance that, if something bad happens to you, the firm on the other end of the policy will make restitutions in one way or another in a timely manner. If a hailstorm damages your home, for example, your property insurance steps in to remunerate you or facilitate the repairs, subject to state property damage laws.

But since determining who is financially responsible for services or repairs is sometimes a tedious, lengthy affair – and delay often increases the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame after the fact. They then need a way to recoup the costs if, when there is time to look at all the facts, they weren't in charge of the expense.

For Example

You are in an auto accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was entirely to blame and his insurance policy should have paid for the repair of your auto. How does your company get its money back?

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 companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Normally, only you can sue for damages to your person or property. But under subrogation law, your insurance company is considered to have some of your rights 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.

Why Does This Matter to Me?

For starters, if you have a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by increasing your premiums. On the other hand, if it knows which cases it is owed 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 culpable), you'll typically get $500 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 Criminal defense attorney Hillsboro OR, 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 looking at the reputations of competing companies to determine if they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their clients updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your deductible back and move on with your life. If, on the other hand, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, even attractive rates won't outweigh the eventual headache.