Subrogation is a concept that's understood among insurance and legal professionals but sometimes not by the policyholders who hire them. Rather than leave it to the professionals, it would be in your self-interest to know the steps of the process. The more information you have, the more likely it is that relevant proceedings will work out favorably.
An insurance policy you have is an assurance that, if something bad happens to you, the insurer of the policy will make good in a timely manner. If your property is robbed, for example, your property insurance agrees to remunerate you or pay for the repairs, subject to state property damage laws.
But since ascertaining who is financially responsible for services or repairs is often a confusing affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame afterward. They then need a means to get back the costs if, when all is said and done, they weren't responsible for the payout.
Can You Give an Example?
You rush into the hospital with a gouged finger. You hand the receptionist your medical insurance card and she takes down your plan information. You get stitched up and your insurance company gets a bill for the services. But on the following afternoon, when you get to work – where the accident occurred – your boss hands you workers compensation forms to fill out. Your workers comp policy is actually responsible for the expenses, not your medical insurance policy. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment 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. Usually, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for making good on 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 a start, 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 have a stake in the outcome as well – to the tune of $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recover its costs by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all ten grand 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 at fault), you'll typically get half your deductible back, depending on your state laws.
Additionally, if the total price 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 lawyers for car accidents Columbus, ga, 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 measuring the reputations of competing firms to determine if they pursue legitimate subrogation claims; if they resolve those claims with some expediency; 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 losses back and move on with your life. If, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then covering its income by raising your premiums, you should keep looking.