Subrogation is an idea that's well-known in legal and insurance circles but rarely by the customers they represent. Even if you've never heard the word before, it would be in your benefit to comprehend the nuances of the process. The more knowledgeable you are about it, the more likely an insurance lawsuit will work out favorably.
Any insurance policy you have is a promise that, if something bad occurs, the company that insures the policy will make good in one way or another without unreasonable delay. If you get injured while working, for example, your employer's workers compensation insurance agrees to pay 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 time-consuming affair – and delay sometimes increases the damage to the victim – insurance firms often decide to pay up front and figure out the blame afterward. They then need a mechanism to get back the costs if, ultimately, they weren't actually in charge of the expense.
Let's Look at an Example
You are in a car accident. Another car crashed into yours. Police are called, 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 entirely to blame and her insurance policy should have paid for the repair of your car. How does your company get its funds back?
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. 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. Ordinarily, 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 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, 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 – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to get back its costs by ballooning your premiums. On the other hand, if it knows which cases it is owed and pursues those cases efficiently, it is acting both in its own interests and in yours. If all $10,000 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 half your deductible back, depending on your state laws.
Furthermore, if the total expense of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as immigration lawyer near me Herriman UT, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurers are not the same. When shopping around, it's worth looking up the reputations of competing firms to determine if they pursue winnable subrogation claims; if they do so without delay; if they keep their clients informed as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you should keep looking.