Subrogation is a concept that's well-known among legal and insurance professionals but rarely by the customers who hire them. Even if you've never heard the word before, it would be in your self-interest to comprehend the nuances of how it works. The more information you have about it, the more likely an insurance lawsuit will work out favorably.
An insurance policy you have is a commitment that, if something bad happens to you, the business that covers the policy will make good in one way or another without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) decide who was at fault and that party's insurance covers the damages.
But since ascertaining who is financially accountable for services or repairs is sometimes a heavily involved affair – and delay in some cases compounds the damage to the victim – insurance companies in many cases decide to pay up front and figure out the blame after the fact. They then need a mechanism to regain the costs if, once the situation is fully assessed, they weren't responsible for the expense.
For Example
You arrive at the Instacare with a deeply cut finger. You give the nurse your health insurance card and he takes down your plan details. You get stitched up and your insurer gets a bill for the services. But on the following day, when you arrive at your place of employment – where the injury occurred – your boss hands you workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the payout, not your health insurance company. The latter has a right to recover its costs somehow.
How Does Subrogation Work?
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 in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For a start, if you have a deductible, your insurer wasn't the only one that 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 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 pursues those cases aggressively, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get $500 back, depending on your state laws.
Additionally, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as asbestos class action lawsuit oshawa ontario, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance agencies are not created equal. When comparing, it's worth looking at the records of competing firms to find out whether they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their accountholders apprised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your money 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 covering its bottom line by raising your premiums, you'll feel the sting later.