Subrogation is a term that's understood among insurance and legal firms but sometimes not by the people they represent. Rather than leave it to the professionals, it is in your benefit to comprehend the steps of how it works. The more information you have, the more likely an insurance lawsuit will work out favorably.

Every insurance policy you own is an assurance that, if something bad happens to you, the company on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and the courts, when necessary) decide who was to blame and that person's insurance pays out.

But since determining who is financially accountable for services or repairs is often a heavily involved affair – and delay sometimes adds to the damage to the victim – insurance companies usually decide to pay up front and assign blame after the fact. They then need a way to regain the costs if, ultimately, they weren't actually in charge of the expense.

For Example

Your living room catches fire and causes $10,000 in home damages. Happily, you have property insurance and it pays out your claim in full. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him liable for the damages. You already have your money, but your insurance agency is out ten grand. What does the agency do next?

How Subrogation Works

This is where subrogation comes in. It is the way 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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is extended 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 insurance company 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 timid on any subrogation case it might not win, it might choose to get back its expenses by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is doing you a favor as well as itself. 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 responsible), you'll typically get $500 back, depending on your state laws.

Moreover, if the total expense 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 car accident attorney lithia springs ga, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurance agencies are not created equal. When comparing, it's worth scrutinizing the reputations of competing agencies to determine if they pursue legitimate subrogation claims; if they do so without delay; if they keep their accountholders posted as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, on the other hand, an insurance agency has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, even attractive rates won't outweigh the eventual headache.